Investors pour millions into startups despite regulatory hurdles
24 April 2019 6:56 AM GMT
Investors believe that they can engage with the government to find an appropriate regulatory framework to operate in.Investors say that if you take a long-term view, these regulations will come and go, and they are careful to examine whether these are temporary and narrow in scope, or long term and nationwide
- While Indian startups across sectors are going through regulatory turmoil, including outright bans, their investors are committing large amounts to these startups and others in the sector, as they take a long-term view and look for outsized returns from risky bets.
- "Investors know that an emerging market like India will have a certain amount of risk, with an evolving regulatory landscape, and that is the risk-reward argument that leads them to take these bets," said Rohan Ghosh Roy, partner at Trilegal who advises on technology deals.
- Even startups such as Uber , currently filing for an IPO, have constantly battled with regulators across the globe in order to find a middle ground, and have generally looked to capture the market first in order to have an advantage when regulators come knocking.
- How will we impact long-term change unless you can back innovation while working around such challenges (like regulation)?" he added.
- When we invest, we examine carefully whether a regulatory ruling or development is a temporary blip or something potentially long lasting.
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