Startups that burn investor money won’t get second chance: Ratan Tata

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Industrialist Ratan Tata on Tuesday warned that startups that burn investors’ money and disappear will not get a second or a third chance.

“We will have startups which will attract attention, collect money and disappear. Such start-ups will not get a second or a third chance,” Tata said at TiECON awards.

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He also urged TiE to work as a shadow regulator for ethics and good practices, and ensure that the startup sector grows.

This comes at a time when startups have been blamed for ‘cash burn’ which means that the optimism of making money in the future makes venture funds to invest and the companies keep incurring losses.

Tata said the startups require mentoring, advice, networking and also recognition, and welcomed the role played by TiE which helps promote the startup ecosystem in India.

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