Mohandas Pai Statement: Indian Startups Resist Pressure To Move Outside
T V Mohandas Pai, a former director of Infosys and the chairman of Aarin Capital stated that startups conduct nearly all of their business in India and startups resist pressure from large investors to domicile outside & citing important lessons to be learned from Silicon Valley Bank’s failure.
According to a PTI report, he cautioned creators of startups focused on India “to be wary” and “not get carried away” by investors who insist that the companies they support have their domicile and bank accounts in the US.
Pai referred to Silicon Valley Bank as “a startup-friendly bank” and argued that its failure is a “blow” to the ecosystem for startups.
Pai added that companies whose businesses are centred around India and have very little to do with the US should operate as an India-headquartered company because the Silicon Valley Bank exposure to the Indian startup environment is not too great.
This week’s abrupt closing of Silicon Valley Bank shocked the startup community, which has been dealing with a steep decline in venture capital funding.
As per Pai, the collapse of a startup-friendly bank Silicon Valley Bank is a blow to many young companies.
He also discussed the necessity for the Reserve Bank of India (RBI) to collaborate more closely with the startup ecosystem in order to facilitate Indian businesses operating internationally.
The industry expert noted how difficult it is for Indian businesses to receive funding from outside and send funds out of India.
He continued by saying it was crucial to make it simple for Indian startups to operate locally so they wouldn’t need to travel abroad or acquire a bank account to conduct international business.
He said that regulations that are burdensome to startups and require excessive documentation ought to be amended.
Rajeev Chandrasekhar who is the Union Minister of State for Electronics and IT, announced earlier today that he will meet with members of the nation’s startup community to discuss the effects of the collapse of SVB Financial Group.
“Undoubtedly, the SVB Financial shutdown is affecting all startups across the world. Startups play a significant role in the NewIndia economy. This week, I’ll visit with Indian startups to learn how this crisis is affecting them and how the @narendramodi government can assist”, he stated in a tweet.