The Indus Entrepreneurs (TiE), a not-for-profit network of entrepreneurs, said Tuesday’s arrest of Yogesh Vasupal, founder of Stayzilla, would prove as a challenge to encouraging startups. TiE president R. Narayanan said, “Several youth from modest backgrounds have seen the opportunity and are trying to emulate the more visible startups such as Stayzilla. Against this background, we have a situation which has reared its ugly head and promises to send Tamil Nadu back to the medieval period.” He noted that there are civilised ways to handle this issue.
Mr. Narayanan pointed out that this was clearly a civil matter which has been presented as a criminal offence. He added, “What is happening on the ground makes for a sad story and an early James Hadley Chase plot. The due process of law seems to have taken a back seat. Who would want to battle against bureaucracy, corruption and a total breakdown of law and order? Even as we speak, the accused has not been given a copy of the FIR and is unable to apply for bail.”
A top entrepreneur and investor who did not wish to be quoted said: “Most start ups will fail. One can’t haul failed entrepreneurs to jail for debts. This is a case of goondas versus startups.” He said the lesson learned from this case is that Chennai, Mumbai and Pune have no political support for startups. He said that Stayzilla was a genuine business failure, and while it might have had outstanding dues to the complainant Aditya CS, owner of Jigsaw Advertising, foisting criminal charges [in a civil case] was nothing less than ‘goondaism’ and a naked display of intimidation. “Yogendra (Vasupal) may be a bad businessman, but he is not a crook and certainly doesn’t deserve to be treated like a criminal.”
Nasscom Regional Director, K Purushothaman, said, “This is a clear case of harassment and ill treatment. Using such methods is not good on the part of the ad agency.”
The Indian Angel Network, one of the early investors in Stayzilla, sent out a statement: “There are challenges in every business and startups have more than their fair share. It is imperative that the legal and regulatory framework supports and encourages new ventures to emerge. Unlawful treatment will trigger a sense of fear in young minds and put the brakes on the Prime Minister’s Startup India dream.”
