wordpress blog stats
Connect with us

Hi, what are you looking for?

Quick Take: Founders and the holes they dig

In finance, a hole you’ve dug is often filled with a deeper hole you dig, and eventually, due diligence reveals fraud.

Startup groups are buzzing about GoMechanic’s founders’ statement that they committed “grave errors in judgment”, for “growth at all costs, particularly in regard to financial reporting”. Journalists calling this an admission of fraud, are being criticised for “kicking people when they’re down”, with defamation lawsuits being suggested against them. Others blame VCs for scapegoating, saying they’re responsible for the pressure to increase numbers for the next round of funding.


FREE READ of the day by MediaNama: Click here to sign-up for our free-read of the day newsletter delivered daily before 9 AM in your inbox.


Such reports are not new: we’ve all heard about bumping up GMCs and inflating expenses in e-commerce. Easy money makes people greedy, greed makes them do stupid things. VCs often ignore corporate governance issues. In finance, a hole you’ve dug is often filled with a deeper hole you dig, and eventually, due diligence reveals fraud. It’s important to course correct to ensure trust in investing, lest there be more regulation: including founders getting sued for fraud by investors. Sunlight is often a necessary disinfectant.


This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

Advertisement. Scroll to continue reading.
Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

India's smartphone operating system BharOS has received much buzz in the media lately, but does it really merit this attention?

News

After using the Mapples app as his default navigation app for a week, Sarvesh draws a comparison between Google Maps and Mapples

News

In the case of the ‘deemed consent' provision in the draft data protection law, brevity comes at the cost of clarity and user protection

News

The regulatory ambivalence around an instrument so essential to facilitate data exchange – the CM framework – is disconcerting for several reasons.

News

The provisions around grievance redressal in the Data Protection Bill "stands to be dangerously sparse and nugatory on various counts."

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ