Startups should be more vocal about their problems with the board and should avoid hiding issues with investors, said Harsh Jain, co-founder and chief executive officer, Dream11.
“Just be open about your problems, your board is not someone you should be worried about thinking oh they are our investors, they will get to know about some of our problems and so they might not invest further,” said Jain, speaking with Kalaari Capital's Vani Kola at T-Hub Innovation Summit in Hyderabad.
“It is very important for your board to know about your problems to work with you on solutions. In fact that makes a much deeper bond that allows them to invest further, because they feel connected to the company. They feel they are with you, working on problems with you,” Jain added.
Jain’s comments come at a time when a few startup founders in India and Southeast Asia including founders of some of the region’s largest unicorns, have had skirmishes with their board members, owing to multiple issues right from sexual harassment claims to accounting irregularities. Startups such as Zilingo, and BharatPe, among others have also struggled to raise funds due to these skirmishes.
“When you're building a company, you're not building the founders. The founders are trying to build an institution that's going to last and so I think it's very important to take the advice of your board members first,” Jain said.
“It may not always be a formal board meeting where you have to put down the minutes of the meeting. Even if it's a formal, once a quarter meeting, I think it's really important to see board members as equal as founders, who are there to help the founders with whatever and you have to treat them as equals and as advisors,” Jain added.
Jain also said that the current downturn in funding is just a timewise downturn as similar downturns have happened over the last 15 years. He added that startups, in downturns, typically focus on building companies, while in upturns, the focus is largely on valuations.“I think it’s a great time for entrepreneurs to roll up their sleeves, and understand that you’re not going to get great valuations, you’re not going to get pre-revenue, pre-idea, $20 million, but this is the best time to learn and I truly believe that startups shouldn’t have that much funding, because that’s what keeps them hungry,” Jain said.