š How the World Startup Convention Scammed Startups
The World Startup Convention has garnered a lot of negative publicity on LinkedIn lately. So, hereās a detailed look at what really happened.
All that glitters is not gold.
That's the World Startup Convention summed up in one line.Ā
Yes, the same convention that everyone has been complaining about on social media platforms.
Like a typical scam, this convention over-promised, looted lakhs and supremely under-delivered.
But above all, this scam may have left a permanent scar on the whole startup ecosystem. How?
Let's take a closer look at how this whole saga unfolded.
š§ How it All Started
It all began in October last year when ads started floating around.Ā
Now, these ads werenāt ordinary ads.Ā
These ads glorified the event.Ā
They called it the biggest startup festival ever. A once-in-a-lifetime opportunity!
The posters for the event featured every famous business person, from Elon Musk to Sundar Pichai to even Gautam Adani!
Looks like the organisers went all out with this event.Ā
They published ads in prominent publications like Fortune India!Ā
Now, if you look at these publications closely, you'll start noticing the hidden shadiness.Ā
Take a look at this excerpt:
Doesn't it look like the convention is being held by the Indian government or some other national authority?
No mention of the organisers, Luke Talwar and Arjun Chaudhary, anywhere!Ā
Well, you could argue that they were kept out of the narrative because they arenāt famous enough for people to shell out Rs. 8,000 for passes.
Yup, Rs. 8,000 for one pass. Sounds steep? But hereās what the event organisers were claiming they would offer in return.
Their ads claimed that 1,500 institutional investors (like Sequoia, and Ah! Ventures) and 9,000 angel investors were going to be present at the event.
Now, overpromising the footfall of the event can be an honest mistake.Ā
But these organisers went ahead with a bigger promise: GET FUNDING IN JUST 3 DAYS!Ā
Now, this is LEGALLY IMPOSSIBLE.
However, many budding entrepreneurs with fire and passion in their belly, who just started their entrepreneurial journey, didnāt know this. They believed this.Ā
They hurriedly bought passes worth Rs. 8,000 in the hope of getting their million-dollar idea funded. In the hope of making it big in the startup ecosystem.Ā
Little did they know: this hope would come crashing down.Ā
On the day of the event, they had the shock of their lives:
There was almost no security
The venue looked vastly different from what was described
There was no food or water!Ā
And well, the core and soul of the convention: startups and investors, both were hardly present.Ā
The investors that were present at the event were hearing pitches out in the open, surrounded by 15-20 folks.
This obviously did not encourage most startups to pitch as their idea or be stolen or their numbers would go public.
All in all, it was a disaster, a sham.
Some founders were so angry that they called the police. FIRs have reportedly also been filed against the organisers.
šÆ The Fuel to the Fire
In a world where we trust 'influencers' and expertise takes a backseat, anything and everything can be mis-sold.Ā
That's exactly what the World Startup Convention did.
All they had to do was get trusted influencers like Ankur Warikoo, Raj Shamani, Chetan Bhagat and Prafull Billore, to promote the event!
That's it. People flocked to buy passes for the Great World Startup Convention.Ā
And well, to seem credible, the organisers made a top-notch website.Ā
The website brags that startups like Oyo and Paytm would be present at the event.
It claimed that investors like Ah! Ventures and Bank of Baroda were going to be there.
These are all trusted names.
But turns out, most of these ventures had either rejected to be a part of the event or had only received inquiries for the event and had declined.Ā
Some had no clue about the event!
Yes, just create a fancy website, pay some influencers and you sell any damn thing in the world.
So,Ā what now?
š The Loss for the Startup Ecosystem
This whole scam has shaken the startup world.Ā
While some lost just Rs. 8,000 on the pass, others travelled across India to attend the event!Ā
Bambrew, a sustainable packaging startup from Bangalore, has to bear losses worth over Rs. 50 lakhs! They spent a lot of money to book their stall, build the stall and build products for display.
This massive loss at a time when there is a funding crunch could devastate the company.
The monetary loss due to the event may be temporary.
But the emotional and trust loss in the whole startup ecosystem is a permanent one.
Trust, after all, is like a piece of paper. Crumble it once, and it shall never be the same again.
This one incident may have crushed the dream of the budding entrepreneur who was looking forward to the event for validation.Ā
This whole saga could have been prevented if the influencers thoroughly vetted what they were promoting.Ā
This whole saga could have been prevented if we did not blindly trust influencers.
What else can be done to avoid such scams in the future? Let us know in the comments!
Share this with your friends via WhatsApp and help them grow! See you tomorrow :)
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Drafting rules and regulations for influencers would be difficult and it won't be within the ambit of SEBI, Since Influencer marketing is more to deal with Advertisement guidelines rather than Stock Market regulators in my opinion
Feels like you have randomly connected the dots - SEBI has nothing to do here. This case is similar to say Mamaearth paying influencers to advertise its product - what will SEBI do here?