Once again, Indian startups are making headlines. And not always for the best of reasons. There is the BharatPe saga, which saw the business fire its enigmatic founder Ashneer Grover. Then there was the Trell fiasco, with accusations alleging that the creators of the short video-based social commerce startup stole money for personal use while constructing it. We also heard of Unacademy’s Gaurav Munjal’s taste for luxury, including operating out of rooms at the Oberoi Hotel and gambling on poker.

Finally, there are allegations that Infra.Market, a B2B e-commerce company, may have engaged in tax evasion.

So, what’s going on here? Is there something seriously wrong with the Indian startup ecosystem, or is this simply a case of journalistic bias?

To begin with, combining several concerns and drawing broad generalisations will not help. Each situation calls for its own discussion. So, if you’re claiming that anything is wrong with the startup ecosystem, you must also characterise the problem in depth.

What exactly is the issue here? Is it arrogance? Is it a ruse? Is it anything completely different?

Consider the BharatPe issue, for example. There were accusations of deception. A threatening phone call was received. There were also reports of a hazardous work environment. If we assume that all of these charges are true, the natural inquiry is, “Why did it take so long for investors to recognise this, especially when you have seasoned board managing matters?”

We have no idea.

Better.com, on the other hand, might be a good place to start. Vishal Garg, the company’s founder and CEO, made news when he fired 3000 employees via a Zoom conversation. Vishal Garg’s management approach was soon the subject of a bombardment of news pieces, including claims of fraud. According to one account, Goldman Sachs, a corporate investor, filed a lawsuit against Garg for misappropriation of funds, but then quietly dropped it because its position in Better seemed to provide more upside than what they would have obtained in court.

The idea is that when investors stand to gain from valuation multipliers primarily due to the founders, they frequently overlook severe infractions. They absolve themselves of all responsibility and oust the founder in question when the potential disadvantages become all too evident. This is an issue not only inside the startup community but also among the investor community that fuels it.

But what about instances of deception that go unnoticed? Isn’t this solely the fault of the founders?

Yes, it is. More particularly, the inclination to consolidate power through whatever means possible. It’s like this: If you want to grow 100 times in a year, you’ll need a centralised decision-maker. You can’t have a management staff that is constantly dragging its feet on every issue. Investors will expect you to put growth ahead of good governance. This creates the ideal environment for entrepreneurs to enrich themselves through deception. Granted, the investors may not be aware of this minor point, but they are acting as unwitting accomplices by setting lax standards.

And, believe it or not, this isn’t simply a characteristic of the startup ecosystem. Remember the NSE instance from a couple of weeks ago? Without experiencing serious repercussions, MD Chitra Ramkrishna managed to run India’s most major stock exchange on the whims of a “yogi.”

This kind of thing is all over the place.

Then there’s the issue of taxes. It’s a no-brainer on this one. Between 2020 and 2021, the GST authorities discovered over Rs 35,000 crore in tax evasion, which did not all come from startups. That is, it affects the entire business community, not just the startup scene.

Finally, we must address the issue of reporting.

It’s acceptable to report about a founder’s management style. It’s highly desirable since you can hold these folks accountable. However, slipping in tidbits about their personal preferences (such as spending tendencies at poker parties) is a low blow. It is not beneficial to anyone. It takes the reader’s attention away from the primary subject and dilutes the relevant arguments.

So, no, the Indian startup environment isn’t exactly a glowing beacon of goodness and integrity. We do have a few egotistical entrepreneurs, self-serving investors, and reporters that get a little carried away from time to time. That isn’t to say that everything is bad. There are entrepreneurs out there who are fixing real problems with little regard for their own well-being. Some entrepreneurs don’t hit the front page because their company isn’t in the spotlight. Other startups go unnoticed since they aren’t controversial in any way. They are silently working behind the scenes to bring about change. The fact that they don’t make it to the front page demonstrates that they’re doing something correctly.

The bunch isn’t ruined by a few bad apples. Not everything, after all, is bad.