{"id":93321,"date":"2023-03-03T11:00:00","date_gmt":"2023-03-03T05:30:00","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=93321"},"modified":"2023-03-03T10:58:19","modified_gmt":"2023-03-03T05:28:19","slug":"biz-murthy-ld-startup","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-murthy-ld-startup\/","title":{"rendered":"VCs neglecting profits wrong, valuation focus for sartups becoming a ponzi scheme in many cases: Murthy"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-1515309283\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>Infosys founder N R Narayana Murthy on Thursday stressed that venture capital funds need to focus on profitability at startups as well, and warned that the focus on valuations is creating a &#8220;ponzi&#8221; scheme.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2089749615\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p>Speaking at the annual Nasscom event here, Murthy said many startups are witnessing repeated rounds of funding at higher valuations, the last of the backers is &#8220;left with a tinbox and added that blame for this does not lie with the young entrepreneurs at the helm.<\/p><p>&#8220;I would hold the VC (venture capital) who propounded the theory that what is important is only top-line (revenues) and not bottom-line (profits). I think that is completely wrong. In many cases, it became a ponzi scheme,&#8221; Murthy said.<\/p><p>The venture capital funds should instead settle for &#8220;deferred gratification&#8221; where they sacrifice in the short and medium term for long term gains, Murthy said, adding that Infosys always practised the same since its early days.<\/p><div class=\"trade-content_5\" id=\"trade-4018424123\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>During a conversation with Kunal Bahl of the e-commerce company Snapdeal, Murthy said along with the &#8220;mature&#8221; venture capital funds, blame for such practices also lies with the board of directors of a startup and also its advisors.<\/p><p>Meanwhile, Murthy said generative artificial intelligence (AI) platforms like ChatGRI will not impact human jobs, reminding that such concerns were expressed with the emergence of &#8220;programme generator&#8221; in 1977-78.<\/p><p>&#8220;This (ChatGRI) will not impact coder. Human mind is the most flexible and can adapt very well,&#8221; he said, adding that people will use the platform creatively and smartly for better purposes.<\/p><p>He said the current set of macroeconomic challenges is unlikely to impact demand for Indian IT companies because they bring in value for clients, and past instances of stress have also demonstrated a rise in demand and revenues for such companies.<\/p><p>When asked about instances of IT companies delaying joining dates for freshers, Murthy said he cannot judge to make a comment without data but reminded that Infosys honoured all its commitments towards 1,500 freshers after the 2001 dotcom bust.<\/p><p>He said the top leaders opted to take deep pay cuts in order to honour all the commitments.<\/p><div class=\"trade-content-10\" id=\"trade-2468151979\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p>On the employability gap flagged by Nasscom, where engineering graduates are found to be lacking necessary skills, Murthy said Infosys had identified this as a problem area way back in 1996 itself and invested in a facility which can train 30,000 people per annum in Mysuru.<\/p><p>A work place needs to have a challenging work environment, a physical environment conducive to creativity, openness, meritocracy and justness to minimise the instances of staffers quitting, Murthy said.<\/p><p>Leadership which focuses on instilling optimism, and leads by example, is also necessary, Murthy said.<\/p><p>Companies also need to focus on protecting its core values and act swiftly the moment they notice a violation, he said.<\/p><p>He said entrepreneurs should quit the pursuit of a business idea only if they find a structural weakness in the business, recollecting that he himself folded up his first venture within months of starting it in 1976. PTI AA HVA<\/p><div class=\"trade-after-content\" id=\"trade-2687401374\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Infosys founder N R Narayana Murthy on Thursday stressed that venture capital funds need to focus on profitability at startups as well, and warned that the focus on valuations is creating a &#8220;ponzi&#8221; scheme. Speaking at the annual Nasscom event here, Murthy said many startups are witnessing repeated rounds of funding at higher valuations, the [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":93353,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1697,31],"tags":[],"class_list":["post-93321","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>VCs neglecting profits wrong, valuation focus for sartups becoming a ponzi scheme in many cases: Murthy - Trade Brains Features<\/title>\n<meta name=\"description\" content=\"Infosys founder N R Narayana Murthy on Thursday stressed that venture capital funds need to focus on profitability at startups as well, and warned that the focus on valuations is creating a &quot;ponzi&quot; scheme.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-murthy-ld-startup\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"VCs neglecting profits wrong, valuation focus for sartups becoming a ponzi scheme in many cases: Murthy\" \/>\n<meta property=\"og:description\" content=\"Infosys founder N R Narayana Murthy on Thursday stressed that venture capital funds need to focus on profitability at startups as well, and warned that the focus on valuations is creating a &quot;ponzi&quot; scheme.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/tradebrains.in\/features\/biz-murthy-ld-startup\/\" \/>\n<meta property=\"og:site_name\" content=\"Trade Brains Features\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/TradeBrainsOfficial\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-03-03T05:30:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/03\/narayan-murthy-cover-image.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"854\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"PTI News\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/03\/narayan-murthy-cover-image.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@TradeBrainsGrp\" \/>\n<meta name=\"twitter:site\" content=\"@TradeBrainsGrp\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"PTI News\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/tradebrains.in\/features\/biz-murthy-ld-startup\/\",\"url\":\"https:\/\/tradebrains.in\/features\/biz-murthy-ld-startup\/\",\"name\":\"VCs neglecting profits wrong, valuation focus for sartups becoming a ponzi scheme in many cases: Murthy - 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