Hush-hush tales from the world of stock markets, banking, corporate world and corridors of power
Last Updated: January 30, 2023 / 09:40 AM IST
Curious mantra for tapping investors
Despite the existence of many loss making new age start ups, listed or unlisted, looks like the sector hasn't learnt it's lessons yet! For meeting a potential investor, some firms still ask for the investor to have a minimum investment threshold
Like for instance, this consumer app asks for the investor to have a minimum $50mn cheque ready before their MD can speak! Another start up, which is making huge losses and recently gave interviews has asked any potential investor to be ready with a $100mn cheque before speaking to their MD. Unlike the traditional system, where an MD will explain the business model to the investor and the investor will then take a call, the system in this case is different we hear. Apparently, for starters, the investor will get a presentation made by a rating agencies or outsourced researchers who make a ppt of the target company
The investor will have to go through the presentation and then will get a 10-15 min call slot to pose any questions to the MD. Good investors, for obvious reasons, avoid such companies where the management has adopted this kind of a approach. One wonders, despite seeing the price of listed peers, why haven’t these start ups changes their ways of interacting with investors.
Shifting focus now to deal street, where we are picking up buzz that this popular and active investor is evaluating options to pocket some returns and shed some stake in this tech company. A final call hasn't been taken as yet we hear but we shall keep a close watch on this one.
It was a gathering that several top bureaucrats graced last week. Many from the corporate and startup world were found to be hard-selling themselves to get in on the latest tech projects of the government. For example, a senior executive of a top bank was pushing to be included in a land mapping initiative. No idea how that would help the banking giant. But the real shocker came when one guest was overheard suggesting to another, "You must help this startup run by X." Why? It's because X is a political scion with links to the ruling dispensation. But, it appears that the founder and scion just share the same name. A false nepo alert, really.
This CEO's spending spree initially gave the company the revenue boost it needed after years of flagging growth but it petered soon enough, as the juice from these acquisitions dried up. We hear the huge sums that went into acquisitions hasn't gone down too well with the promoter, who is known for his careful and conservative spending ways. One industry watcher infact quipped recently that the CEO's run will probably last for another year at best. It remains to be seen if the company's luck will turn in the next year or or could be marching orders soon for this aggressive and assertive CEO.
Once bitten, twice shy
Recently an adtech startup was seeking funding and had tapped a few PE/VC investors. One of the investors that the startup tapped, has invested large sums in edtech companies before but had never invested in an adtech firm. The investor's edtech bets, however, have turned sour and so its partners in India have strict instructions to not invest in an edtech company any time soon. When the banker of the adtech startup (which is seeking funding) called this VC and said, "an adtech company is seeking $xx million," the VC said,"sorry we are out," without even listening to the banker fully, as he heard "adtech" as "edtech." However, we hear that the conversations were then taken forward by both the parties as they are now exploring a potential deal!
In an exclusive relationship
Over the years, agencies have come up with different models to handle conflicting accounts including second agencies to handle big businesses. We are now hearing that clients want agencies to be their exclusive partners. They don’t want them to handle any other competitive brands in any way. However, they are not ready to pay a premium for these exclusive arrangements, especially to leading creative agencies. So a lot of clients are looking for small shops who can be exclusive partners at one third of the cost. A CXO of a top creative agency says, this option of plenty is killing the traditional agency models and the old guard needs to buckle up. Fair warning.
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