Startups that burn investor money, disappear won’t get second chance: Ratan Tata

MUMBAI: Industrialist Ratan Tata on Tuesday warned that startups which burn investors’ money and disappear will not get a second or a third chance.

Tata, who also invests in startups, also said old-age businesses will recede and the young founders of innovative companies are the future leaders of the Indian industry.

The comments from Tata come at a time when many startups have been blamed for what is termed as “cash burn”, wherein the optimism of making money in the future makes venture funds to invest in such companies, and the companies keep incurring losses. At its peak, e-commerce major Flipkart was reportedly burning $150 million a month.