Startups Need To Be IPO-Ready, Not Just IPO-Hungry: Sanjeev Bikhchandani

Startups must stop treating venture capital as free money and IPOs as a branding stunt, warned Info Edge Founder and Executive Vice Chairman Sanjeev Bikhchandani in a conversation that cut through the glamour surrounding India's startup boom.

“If you take investors’ money, you have to be ready to give them an exit,” Bikhchandani said, explaining that venture capital funds ultimately owe returns to their own backers, which include institutions, high net-worth individuals and family offices. “Either don’t take their money or be prepared to work toward an exit.”

That exit, he said, could be a secondary sale, a company buyback or a strategic sale. But in India, the most rewarding route is often a good IPO.

“A good IPO becomes a win-win. The company goes public, the investor gets a market exit, and the founder gets independence from shareholder agreements,” he said, adding, “But trying to take a company public before it’s ready is a recipe for disaster.”

Despite patchy post-listing performances by some startups, Bikhchandani said fundamentally strong businesses can claw their way back, but only if investors are patient.

Bikhchandani said he and his team meet nearly a thousand startups every quarter. While trends like artificial intelligence are dominating, it is not always about spotting the next big idea.

“What you see at an early stage is something interesting, getting some customer traction, with a good team behind it. You go in out of belief, a leap of faith,” he said.

His advice to young entrepreneurs? Take capital only if you understand the responsibility that comes with it, and never confuse funding with success.

India’s startup boom is being fuelled by a cultural shift, Bikhchandani said, with top talent increasingly choosing entrepreneurship over traditional corporate careers.

“Earlier, the best-educated graduates would aim for jobs at multinational companies. Today, many of them want to build their own ventures,” he said. “When the brightest minds turn to entrepreneurship, it strengthens the entire startup ecosystem.”