Each day, a new startup emerges, aiming to solve unique problems with advanced techniques. Some are driven by problem-solving, others by adapting to the fast-moving world and upgrading their offerings. But one common factor binds them: raising funds. Most startups seek funding for operational growth. In this article, let’s dive deeper into this dynamic of startups and funding.
Value or valuation
You may wonder—what’s the difference between value and valuation? Value is about creating products or ideas that bring a positive impact to society. A startup should ideally aim for this value creation.
But how is it going?
Many startups today focus less on value creation and more on valuation—the estimated worth of their company, often set by investors. Chasing high valuations over genuine value has led many startups to fail. A line that captures this trend goes:
“The fundamental of a business is value creation; today’s scenario is a circus of valuations.”
How to get talent:
Many startups bring in CEOs from established companies, thinking their experience will automatically translate to success in a new environment. However, this doesn’t always work—what succeeded in one setting may not fit the unique challenges of a startup. When building your team, focus on finding talent that aligns with your vision and culture, rather than just impressive titles. The best fit might be someone younger or less experienced but with the adaptability and passion to grow with your company.
Another key consideration is how to compensate talent when you’re at the early stages of your startup journey. Since funds may be limited, offer value beyond money—invest in your team by sharing your knowledge and experiences outside of regular working hours. Build a sense of camaraderie by treating them as friends, not just colleagues. This personal approach can foster loyalty and commitment, making them feel like true partners in the business.
Startup Scams
Unfortunately, “startup scams” have become all too common. Many startups enter the game solely to boost their valuation. They use early investment rounds to build a presence, then seek further rounds without a solid growth strategy. Some even go public through IPOs while still uncertain about their growth path, chasing capital rather than stability.
Now a doubt may arise in your head after reading here that even after knowing a startup doesn’t have any growth potential, who is giving investments to these startups?
The role of financial institutions:
Financial institutions play a major role in today’s economy, yet the real maneuvers often happen behind closed doors in boardrooms. Many of these institutions manage the capital of large market players, channeling substantial funds into a variety of startups. By funding multiple startups, they hedge their bets—recovering and profiting from a few successful ventures, even if many don’t yield returns. This approach benefits the institutions, but it doesn’t always trickle down, raising questions about the true motivations and impacts behind these funding decisions.
One more type of funding scam is when people or the broker take some percentage of your funding and will ensure that you will be definitely funded.
Lack of education:
What’s often overlooked is the essence of true business. Many startup founders choose to register their companies in tax-friendly countries like Singapore to avoid local taxes. Meanwhile, real businesses are thriving on the streets of India, where small vendors faithfully pay their taxes and often manage multiple stores across the city. This is the heart of entrepreneurship—rooted in local communities, contributing to the economy, and growing organically. That’s what true business means.
We often celebrate the funding raised by startups, but what truly deserves recognition are the small businesses consistently paying taxes and supporting the local economy. Society seems to be caught in a cycle of celebrating the same stories and creating a FOMO around startups and fundraising. But it’s essential to look beyond the hype—figure out what genuinely aligns with your life and goals. Instead of following trends, ask yourself: How does this path benefit me? Keep asking until you find clarity on what really works for you.
The Hustle
Launching a startup demands time and effort, often placing the burden heavily on founders. While dedication is key, over-involvement can limit growth potential. Here’s a smarter approach:
Focus on the core idea and establish profitability.
Automate repetitive processes as you scale.
Build a capable team, and eventually, appoint a manager to oversee operations.
This creates a self-sustaining structure, freeing up founders to focus on innovation, new products, and expansion. Sustainable growth comes from diversification and a strong product lineup.
For Growth
Based on insights from a seasoned startup HR professional, focusing on value over valuation is crucial. A well-rounded strategy that incorporates these seven pillars can drive startup success:
Marketing
Sales
Operations
HR
R&D
Accounts & Finance
Management
Mastering these areas can position your startup for long-term growth. After all, true success comes from creating lasting value—not just playing the valuation game.
Startups are not a scam; they’re a modern approach to solving problems, creating jobs, and identifying talent. However, some have turned it into a game of inflated valuations. Funding should be used to scale a business, not just build dreams detached from reality. Many overlook the risks of valuation bubbles and see them as positive wealth creation. But let’s remember: startups play a vital role in the nation’s growth when they’re focused on real, sustainable impact.