VCs get more involved in CXO search at early-stage startups

An increasing number of compliance- and governance-related issues at Indian startups is leading venture capital investors in early-stage companies to push for greater involvement in the recruitment process for crucial governance roles and appointment of key management personnel, at least half a dozen fund managers told ET.

This comes at a time when the Indian startup ecosystem has been mired in a spate of financial mismanagement, flurry of layoffs and reports of non-compliance with regulations.

“Anshuman Das, CEO of LONGHOUSE Consulting, said, “Earlier what would typically be a private equity playbook for larger startups is now being seen among the early investors — VCs investing $10-20 million and in companies where founders could earlier bring in their own network of people, investors are now scrutinising the merit of such hires and insisting on a seasoned team.”

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