Shantanu Deshpande, founder and CEO of Bombay Shaving Company, addressed the increasing trend of startup failures in India through a LinkedIn post. He acknowledged the inherent risks of entrepreneurship and expressed concern over the emotional and financial fallout faced by founders and investors alike.
Five Suggestions for Startup Founders
Deshpande outlined five critical suggestions for founders navigating difficult phases:
- Early and Transparent Communication
Founders should inform investors early when challenges like low runway, missed targets, or poor sales arise. He emphasized that distress signals are visible six months in advance, and delaying communication only worsens the situation. - Set Aside Ego in Crisis
During tough times, he advised founders to avoid posturing and instead accept any deal that helps the company survive. Acting from a perceived “position of strength” can be counterproductive when resources are running low. - Act Aggressively to Survive
Deshpande urged founders to take decisive actions such as cutting costs, finding buyers, and using investor networks to sustain the business. The goal should be to outlast the crisis and return stronger. - Avoid the Victim Mentality
Drawing from his own eight-year journey, he cautioned against falling into self-pity. He encouraged founders to face adversity with courage and accept market realities without shifting blame. - Respect for Investor Money
He stressed that losing angel investors’ money should not be taken lightly. Founders must show accountability in both their communication and conduct. The mindset of dismissing the loss as mere equity risk is, in his view, unacceptable.
Reputation During Crisis Matters
Deshpande highlighted that a founder’s true character is revealed during difficult periods. He criticized those who react poorly or play the victim, suggesting that such behavior leaves lasting negative impressions and damages trust. On the other hand, he praised those who handle failure with integrity and fairness, noting that they earn long-term respect.
Community Reactions
Investment professional Ashwin Suresh commented that some rare founders even return leftover capital to investors when their ventures fail to meet market needs. Deshpande supported this, calling it an act of “insane courage.”
Entrepreneur Aniket Nikumb also shared admiration for founders who took steps to minimize investor losses, such as buying back stock or returning partial funds. He criticized those who attempt manipulative tactics during shutdowns, labeling such behavior as damaging and unforgettable.
Response to Criticism
When asked why his post focused on investors rather than entrepreneurs, Deshpande clarified that his views come from personal experience and reflect his expectations from fellow founders.
Focus on Accountability and Integrity
Through his post, Deshpande emphasized the importance of integrity, humility, and responsible decision-making for startup founders, especially in times of uncertainty or failure. His message calls for a culture of accountability and transparency within the startup ecosystem.
