Uneasy lies the start-up head

While start-ups in India are not inherently better managed, their promoters seem less secure compared to shareholder-driven, board-managed companies

India Inc is overwhelmingly family-owned and managed. This is true of the start-up world, where the concept of management by friends and family is its unique selling proposition. Yet the investor ethos that governs the two could not be more different.

Few promoter-managers of family-managed entities have been ousted from their companies by boards or shareholders for mismanagement — and there are plenty of examples — unless they are guilty of outright fraud and malfeasance (such as YES Bank).

Compare this with the start-up world where private equity and venture capital assess performance through “valuation”. This inherently opaque metric gets