In today’s Finshots we tell you the story of how India’s biggest startup meet turned out to be a farce
India’s startup funding winter is getting worse. Startup deals are at a 9-year low. In fact, according to VCCircle, one startup received funding every 10 hours during February. But last year, deals happened every 3 hours. Investors are tightening their purse strings.
Now imagine you’re a startup founder who’s just getting started. You believe you have a moonshot idea. But this funding environment is proving to be a damp squib. You’re getting desperate because you need capital. You think that all you need is a chance to get in front of a VC.
Suddenly, a post appears on your Instagram feed from some World Startup Convention. It has got Elon Musk’s image and it says, “World’s Biggest Funding Festival. Ever.” It claims Musk is invited (thereby implying that he may attend it too). And it lists a whole bunch of VCs and PE firms who’ll join in.
You’re intrigued. And then you see the best part? It’s all happening right here in your backyard in India — in Noida.
You quickly visit the website and you’re now more impressed with the numbers. The website boasts that there will be 1,500 VCs, 9,000 angel investors and over 75,000 startups from across the world. It has even got the face of Masayoshi San of Softbank, Gautam Adani, and India’s top ministers plastered on posters. The website’s quite snazzy too. It looks quite legit.
But it seems too good to be true. Your spider-sense is tingling a little.
Then you scroll down further. And your confidence rises. You see videos by Ankur Warikoo, Chetan Bhagat, Praful Billore, and Raj Shamani. They’re all glowing with praise about the event. Selling the proposition that you can get funded in just 3 days during this conference and why it’s important for you to attend.
Done. You don’t need to do any more due diligence. You believe that the influencers would’ve done their checks. They’d have enquired about the people behind the event before endorsing it. You trust them.
So even if the price of admission — ₹8,000 — might seem a tad bit high, the opportunity seems too good to pass. This might be your only chance to hobnob with the VCs. It might give your startup a real chance at success.
You sign up!
Then, the first red flag emerges.
The event is postponed. From January to March. From a sprawling Golf Course to the cramped quarters of an Expo centre.
But it’s okay. You’ve just seen a tweet of the event organizers with a top minister of the Indian government. And then you see an article in one of India’s top business publications about the event too. You don’t realize it it’s an advertorial — basically an ad that reads like a story — but the picture of the minister with the organizers builds up the confidence again.
So you spend another few thousand bucks. You book the flight tickets. You finalize your hotel. You’re excited.
And when the day finally arrives, you make your way to the convention. The sight of the near empty hall shocks you. There’s no Elon Musk. There’s no big venture capital company. Inc42 says there wasn’t even water to drink.
Startups that shelled out ₹50 lakhs under the garb of ‘sponsorships’ are fuming. Founders with dreams in their eyes are standing around shell shocked wondering who to make their pitch to. Then the cops arrive and it’s like a scene out of a movie.
By now you’ve realized that promised land doesn’t exist. The event is a sham! The organizers fooled you. The influencers sucker punched you. And you’re left holding your head in your hands wondering — why do we fall for these things again and again!
Well, there could be 3 answers to this.
For starters, humans are inherently trusting. We want to believe that the people don’t have bad intentions and aren’t out to trick us all the time. The default emotion is trust. And that’s what scammers and even influencers prey on. You think why on earth would someone lie about helping you raise money for your startup? Especially on public forums.
Then, there’s the human desire to win. One theory is that people think of a such events in terms of odds — what is the initial risk versus the possible reward. In this case, for people who bought tickets it was roughly ₹8,000 against the possibility of raising a few crores in capital. So even if you feel something is off, it won’t matter much. That tiny glimmer of hope causes people to take the plunge. Especially in the midst of a funding winter.
Finally, there’s the innate self-confidence. The feeling that ‘this won’t happen to me’. That you’re actually too smart to fall for a con. And once that emotion creeps in, any due diligence you would’ve done as a skeptic is thrown out of the window.
Now we’re not saying that the World Startup Convention was an outright scam. Let’s give the organizers Luke Talwar and Arjun Chaudhary the benefit of the doubt now. Maybe they truly wanted to do good. And they were just caught in a heady high of the startup world. They wanted to be useful. And since they didn’t have any $1 billion idea themselves, they tried what they thought would be the easiest way — launch an event to connect startups and make some money in the process.
Maybe they didn’t realize that such massive events can’t be pulled off in a 3-month timeline. Just look at the Slush startup event that happens in Finland with over 12,000 attendees. The planning starts a year in advance.
Maybe they hired the wrong people to conduct the event. If you look up World Startup Convention on LinkedIn, you’ll see a whole bunch of folks have listed it as their employer. But look closely and you’ll see most of them are college students. They’re probably just looking to make some pocket money on the side by volunteering (if they got paid at all that is). Or just pad up their resume to show their organization and event management skills.
Maybe that’s not the employee base you want to run the ‘biggest startup event in the world’, no?
And it also doesn’t seem like the organizers simply took the money and ran. Apparently, they were at the venue on the day of the convention. Also, the fact that they’d even got a private meeting with a top minister in the central government is definitely worth diving into, don’t you think?
Sure, the organizers will be questioned. And if there are skeletons lurking in their closets, they will tumble out. If their intention was a massive scam riddled with lies, they will hopefully be brought to justice. That’s just how things should be.
But in the midst of all this, we shouldn’t forget one key thing. What on earth do we do about influencers?
See, it’s not the first time they’ve been in the soup over promotions that turn out to be duds. And you have to wonder if they even do their due diligence on their endorsements. In this case, countless students, founders and startups who latched on to their every word and trusted them are the victims. Unfortunately, it just seems like a cycle that’ll keep repeating.
And the only thing we can do is be skeptical of every claim and ad we see on social media.
Until then…stay safe!
PS: Here’s something ironic. Guess what’s the Twitter handle of the event…
@WorldStartupCon. Yup, Con!
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Ditto Insights: Why Millennials should buy a term plan
According to a survey, only 17% of Indian millennials (25–35 yrs) have bought term insurance. The actual numbers are likely even lower.
And the more worrying fact is that 55% hadn’t even heard of term insurance!
So why is this happening?
One common misconception is the dependent conundrum. Most millennials we spoke to want to buy a term policy because they want to cover their spouse and kids. And this makes perfect sense. After all, in your absence you want your term policy to pay out a large sum of money to cover your family’s needs for the future. But these very same people don’t think of their parents as dependents even though they support them extensively. I remember the moment it hit me. I routinely send money back home, but I had never considered my parents as my dependents. And when a colleague spoke about his experience, I immediately put two and two together. They were dependent on my income and my absence would most certainly affect them financially. So a term plan was a no-brainer for me.
There’s another reason why millennials should probably consider looking at a term plan — Debt. Most people we spoke to have home loans, education loans and other personal loans with a considerable interest burden. In their absence, this burden would shift to their dependents. It’s not something most people think of, but it happens all the time.
Finally, you actually get a pretty good bargain on term insurance prices when you’re younger. The idea is to pay a nominal sum every year (something that won’t burn your pocket) to protect your dependents in the event of your untimely demise. And this fee is lowest when you’re young.
So if you’re a millennial and you’re reading this, maybe you should reconsider buying a term plan. And don’t forget to talk to us at Ditto while you’re at it. We only have a limited number of slots everyday, so make sure you book your appointment at the earliest:
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