Gopal Srinivasan, Chairman and MD of TVS Capital Funds explains why Investors should not be punished based on one-off events.
Last week saw an outpouring of grief nationwide over the tragic decision made by an Indian entrepreneur to end his life. V.G. Siddhartha of Café Coffee Day had built a pioneering consumer business and acquired one of the largest retail footprints in the food and beverage space in India, attracting marquee investors. His story is a stark reminder that entrepreneurship is a journey of highs and lows, which doesn’t just require capability and risk appetite on the part of the promoter but also demands great resilience.
Along with commiserations, the incident has also attracted some sweeping criticism — uninformed and unjustified — of the business practices of the private equity and venture capital industry. The truth is that the risk capital supplied by venture capital investors has been invaluable to entrepreneurship in India, where promoter funding by banks is frowned upon and founders are forced to rely on family and friends or take recourse to high-cost informal debt.