What happened at GoMechanic.in is nothing but pure negligence.
Probably this news was a tipping point for me to write this post that I have been meaning to write for a while now.
With all due respect to entrepreneurs out there who are taking the road less travelled and creating wonderful start-ups creating employment opportunities.
But in recent times there have been far too many such instances where good ideas are coming under the radar for misrepresentation, fraud, inflated valuations, and now as basic as financial reporting! Come on!
IMHO, the solution is not doing a forensic audit, firing the CEO or pulling the plug now, but by addressing fundamentals at the root.
I would bet most businesses at Seed or Series-A stage would have their first financial model aiming to make the business sustainable and for some reason sustainability is replaced with fantasy creatures along the way.
Who is to blame?
Is it just the founder/CEO? I would say everyone privy to this information is accountable. From the decision makers to the reporting team and even the external advisors.
As consultants, we meet exciting entrepreneurs and like everyone else they are extremely passionate about their businesses. It is our job to ensure that we give an honest view of the business, their internal reporting and help them fix it.
I believe that if there was a voice who persuaded to course correct mistakes early on, such expensive mistakes could be avoided.