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The Silicon Review Asia

A few lessons to learn from Binny Bansal’s exit from Flipkart over ‘personal misconduct’ charge

A few lessons to learn from Binny Bansal’s exit from Flipkart over ‘personal misconduct’ charge

When Walmart announced that it was acquiring 77% share in Indian e-retail behemoth, Flipkart, it seemed like it will be the hottest discussion of the year in the startup world. However, the conversation shifted to Binny Bansal’s resignation from the company. It startled the world of e-commercewhen Walmart announced that Flipkart co-founder Binny Bansal was quitting the company after “Personal Misconduct” probe in November. It followed soon after Sachin Bansal, the other co-founder of India’s most sought-after e-commerce business sold his last percentage of the share that he had held.

Since that incident, founders have been more aware of the needs to protect their share from investors who tend to control the company. They have started to demand shares with disparate voting rights. Even the small businessmen have decided to protect themselves while raising capital.

Both the founders have sparked the debate about the shareholders having adequate control over the decision-making. Another entrepreneur said that a company’s vision and culture could be affected when a startup continuously raises capital for development.  “New investors who invest millions of dollars might have a different plan or vision for the company. Such conversations have become regular with the growing influence of foreign capital,” said the founder of a Bengaluru based startup.

Other executives like Ola co-founder BhavishAggarwal sensed the situation and demanded tighter control over the company. Avnish Bajaj, founder,and Managing Director of Matrix Partners India talks about the need forbalancing control and need for new capital. 

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