Lifting startups from the governance hole

Founders must prioritise governance from the outset rather than deferring it until just before the IPO if they want to create long-term value

Startups attract our attention either when, based on their rising valuations, they are celebrated, or when their valuations come crashing down. Three years ago, the music did not stop, and valuations kept soaring. Every other day, a new soonicorn (a valuation of between $500 million and $1 billion/ Rs 4,000-Rs 8,000 crore) or a unicorn (a startup with a valuation of over $1 billion, or Rs 8,000 crore) was anointed. And now, suddenly, it seems all the chairs have been removed.

Why has the mood soured? The uncomplicated explanation is that the valuations moved in lockstep with the flow of funds.