Despite the existence of many loss making new age start ups, listed or unlisted, looks like the sector hasn’t learnt it’s lessons yet! For meeting a potential investor, some firms still ask for the investor to have a minimum investment threshold
Like for instance, this consumer app asks for the investor to have a minimum $ 50mn cheque ready before their MD can speak! Another start up, which is making huge losses and recently gave interviews has asked any potential investor to be ready with a $ 100mn cheque before speaking to their MD. Unlike the traditional system, where an MD will explain the business model to the investor and the investor will then take a call, the system in this case is different we hear. Apparently, for starters, the investor will get a presentation made by a rating agencies or outsourced researchers who make a ppt of the target company
The investor will have to go through the presentation and then will get a 10-15 min call slot to pose any questions to the MD. Good investors, for obvious reasons, avoid such companies where the management has adopted this kind of a approach. One wonders, despite seeing the price of listed peers, why haven’t these start ups changes their ways of interacting with investors.
