BackLife and times of a startup founder after a million-dollar exit
Moving on from a business you've built can be hard, even if you made a lot of money in the sale. Raghunandan G., founder of TaxiForSure that was acquired by Ola, shares his story
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What’s Raghunandan G.’s cardinal rule for a founder exiting a startup? Don’t rush into another venture, even if you feel the crushing weight of other people’s expectations. Raghunandan, co-founder of TaxiForSure, which was acquired by cab aggregator Ola in 2015, explains: “When you are running a fast-growing company, there is no time to reflect on a problem you may want to solve with your next startup. So it’s not advisable to immediately jump into something new."
Ironically, Raghunandan did the exact opposite after TaxiForSure was acquired for a $200 million (around ₹ 1,363 crore now) cash and equity deal. “Because I always felt something was taken away from me, I wanted to find a way back into the startup ecosystem," he says, alluding to the fact that TaxiForSure failed to secure funding following the 2014 Uber rape case in Delhi, and that forced the company founders, Aprameya Radhakrishna and Raghunandan, to make the tough decision to sell.
He spent six months after the TaxiForSure sale working on a fintech startup, struggling to navigate people’s biases that were a by-product of his previous success. He is no longer with the company, and, in retrospect, says, “If someone had told me to take it slow (after TaxiForSure was acquired), I probably wouldn’t have believed them."
Moving onward
While there’s plenty of advice on how to build and scale a successful startup, it’s hard for entrepreneurs like Raghunandan to get guidance on what to expect after they sell their business.
There is no better time to address that problem. According to a report released by Inc42 Media, over 343 merger and acquisition deals have taken place in India since 2015. Exiting founders may be walking away millions of dollars richer, but many of them aren’t prepared for the loss of purpose that follows.
After Raghunandan and Radhakrishna signed the deal, the former recalls the feeling of emptiness. “Our identity was taken away," he says. “I was used to waking up full of ideas, sharing them with the team and watching everyone work towards accomplishing them. To no longer have that can become extremely emotionally overwhelming." People may find it hard to sympathize with your predicament when you walk away with a ton of cash, but, as Raghunandan sees it: “Yes, we made money and that gave us financial stability, but it didn’t excite us. After all, we didn’t start the company just for rapid wealth creation."
The next steps
Immersing themselves in managing their new wealth is one way entrepreneurs can pull themselves out of the funk. This is also a good chance to strengthen relationships that may have become strained owing to the demands on a founder’s time. “I would get home when my two-and-a-half-year-old kid was asleep, and leave before the child woke up. I hardly spent any time with him earlier," says Raghunandan, who also learnt swimming and participated in the Ironman Gurye Korea triathlon last year.
Dealing with mundane tasks is another challenge, but one that can be overcome quickly. “A lot of things which were earlier taken care of by the company, I had to learn to do myself, like booking tickets, scheduling appointments, etc. After I missed a couple of meetings, I began making my own calendar entries," Raghunandan says.
Three years down the line, does he think about how his legacy has been erased by the acquisition or what TaxiForSure’ valuation might have been today? “Do I feel bad that so-and-so company is now valued at $5, 10, 20 billion dollars? Not really. We had a good run, and, in our wildest dreams, we couldn’t have imagined selling the company for what we got," he says, adding: “As for my legacy, well, we’ve always lost things in life but we move on and associate ourselves with newer, different things. What I do miss is not the legacy or the brand, but the people and those fun exciting times."
For now, Raghunandan has no plans to set up another startup, though he admits he feels the pressure. “We are not movie actors or cricketers that need to give one hit film or inning after another," he says. He is of the opinion that his real strength lies in his current role—researching how to take India’s startup ecosystem to the next level. “It would be easy for me to cocoon myself in a new project, and tie my success or failure to it, but to help build an environment that supports multiple million-dollar companies is where I feel my true calling lies."
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From founder to CEO
Should a startup founder expect to stay on after the company is sold? That’s the billion-dollar question being asked after Flipkart’s Sachin Bansal was reportedly sidelined by Flipkart-Walmart deal. To avoid a similar fate, Ola co-founder and chief executive Bhavish Aggarwal is strengthening his legal rights against potentially hostile action by shareholders.
“It’s a good preventive step in case of a forced merger with Uber," says Raghunandan G., who thinks it's unlikely to come to that. “In India, founders are a quintessential part of the company. It's what differentiates us from other startup ecosystems," he says, adding that the call for the TaxiForSure founders to leave immediately after the company was acquired by Ola was a unanimous one. “Unlike Flipkart, ours was a direct competition acquisition, so this was the best decision for all of us. Staying on would have slowed down decision making and given our competition (Uber) an edge," he says.
India's startup culture, Raghunandan believes, doesn't take voting rights seriously. “With today's trend of four-five co-founders, no single founder has more than a 10% stake in the company. If voting rights were important, I can't think of how many people would have got replaced. It was a huge deal when Kalyan (Krishnamurthy) replaced Binny as CEO but we don't have too many examples of that kind," he explains.
If voting rights are asserted to remove a founder, there will essentially be no difference between an Amazon and Flipkart or an Ola and Uber, he says. “Remove that X factor and you are a nobody. Investors understand that, that is why they don't really want to replace any of the founders."
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