Startups must comply with self-regulating ecosystem: Amitabh Kant

Startups: Indian startups must comply with a self-regulating ecosystem for ushering in transparency and ethical behaviour, according to G20 Sherpa Amitabh Kant.

Speaking at StartUp Mahakumbh on March 18, former NITI Aayog CEO said chasing valuation at all costs sometimes causes misgovernance.

If India wants to create a vibrant startup movement, re should be no regulatory intervention, Kant said since “government regulation stifles innovation”.

country has been able to create third-largest startup ecosystem in world, with India facing a challenge to make it number one nation of startups in world in next five years.

"Startups must here to a self-regulating ecosystem governance as this will bring in transparency, ethical behaviour in our statup ecosystem," he said.

Noting that startups are 'national assets', Kant said y must bring in best practices. Following se best practices will ensure startups trust ir stakeholders, attract investors and finally attain sustainable growth.

"It is very important that startups should focus on growth...(but) valuation at all cost sometimes les to misgovernance," he noted.
Kant also spoke about challenges some startups in India faced recently, emphasising that all startup leers leers must ensure proper financial management and audit.

"In my experience, I have witnessed startups flourishing, while ors like BYJUs, GoMechanic, Housing.Com and Trell faced challenges. re must be good corporate governance in place.

Kant noted that re should be no government intervention if India looks to create a vibrant Indian startup movement.

"All of you entrepreneurs are innovators. As you grow and expand, you must ensure that re is proper financial management and a proper audit. Self-regulation is key," he said.

Kant also stressed on investment of funds from Life Insurance Corporation (LIC), pension funds, and HNI's into Indian startup movement.

He pointed out that Indian startups have recorded a 20 times jump in funding, almost 12 times growth in number of investors and an 8 times increase in number of incubators, ding that re is a requirement for focusing on exits for venture capital investors.

Kant also suggested that India needs to learn from countries like Israel as y started innovating military tech, cyber security and defence equipment.

"By initiating procurement and aggregating demand, Israeli government catalysed growth for startups, ultimately driving economic expansion. Growth comes when government is first buyer," he said.

(With PTI Inputs)