India’s ‘biggest startup scandal’: How one event in India’s Noida scarred India’s entrepreneurial ambitions

Elon Musk, Gautam Adani, India’s top ministers and leading global investors, all under one roof in India’s national capital region: what more does a startup founder need? Such was the promise of the “The World Startup Convention” that over 100,000 fund-seekers worldwide applied for registration. Luke Talwar, the event’s co-founder, declared in December it would be the world’s biggest funding festival with the target of raising investments worth more than INR 100,000 crore [or $12 billion]. The three-day event was supposed to be held at the Expo Mart located at Knowledge Park in Greater Noida, on the outskirts of the Indian capital New Delhi,  from March 24th.

 

Sohil Shah, the founder of Spreadd.io, a Dubai-based ‘Decentralised Creator Economy’ company, decided not to squander away this godsent opportunity to raise funds. He discussed the idea with his colleague Sayan Sapui and declared that he will be flying his entire team to Noida to pitch to investors. Sayan surfed the web to know more about the event and his findings really made an impression.

 

The homepage of the official website of the World Startup Convention featured top Indian officials including Union Minister of Road Transport and Highways Nitin Gadkari and Chief Minister of India’s northern state of Uttarakhand Pushkar Singh Dhami.

The icing on the cake were promotional messages from India’s top influencers. Ankur Warikoo, Chetan Bhagat, MBA Chaiwala and Raj Shamani, all of them were singing the praises of the event.

In his message, Warikoo can be seen saying, “1,500 VCs [venture capitalists], 9,000 angel investors, India’s leading banks and 75,000+startups will be present at the event.” Raj Shamani, in his message, recommended founders to book passes and turn their startup dream into reality.

  

Luke Talwar and Arjun Chaudhary, the founders of ‘World Startup Convention’, also hinted that eminent personalities like Elon Musk (CEO of Tesla), Gautam Adani (Founder & Chairman of Adani Group), Sheikh Hamdan (Crown Prince of Dubai) and Sundar Pichai (CEO of Google) will attend the mega event. Interestingly, they all were referred to as “special invitees” and not “attendees” in posters used for event promotion.

“Having seen a few ads of the event myself featuring a few of India’s top influencers, I agreed to go,” Sayan told WION. But within days, when Sayan’s colleagues at spreadd.io dug more into the event and history of its founders, their perception of World Startup Convention dramatically changed. “After research by one of our team members named Nikunj Kachhiya, he realised that this company organised some events like this before too and the participants left some negative tweets and reviews about them,” Sayan said.

 

Eventually, Sayan and his colleagues decided against going to the event.

But many others, including Vaibhav Anant from Bambrew, gave their all to secure funding at the event. Team Bambrew “invested over 50 lac [five million] rupees” to make their presence felt at the World Startup Convention, according to a statement by Anant.

 

But the turnaround of events that took place on 24th March stirred a massive uproar in India’s entrepreneurial community. What was supposed to be the world’s biggest startup funding festival turned out to be “India’s biggest startup scam.”

 

“There were only 70 founders present at the event, and no good investor,” Anant said.

 

In no time, the founders realised they had been scammed out of their hard-earned money.

 

What came hot on the heels was a clash between founders and organisers. Some founders climbed on the stage and demanded compensation. Police had to be called in.

 

“Apparently, standing on the World Startup Convention stage in Noida are not the investors from Sequoia or Accel, but cops from the Uttar Pradesh Police,” wrote Rajan Singh, CEO of HabitStrong, on LinkedIn.

 

“We had very high hopes. This was the biggest investment we made in a convention like this, and we are devastated to the core,” Vaibhav Anant said. “Nobody is going to believe the idea of such a convention like this in future, even if it is genuine,” Anant said in a video message.

 

Disgruntled founders are now planning to take legal action against the organisers and the influencers who promoted this fake event.

 

“The World Startup Convention has affected a few of our startups. Apart from monetary, there has been a huge loss of trust and morale. We are trying to take collective legal action against the organisers,” wrote Vandana Rungta, co-founder of WerFunds Pvt Ltd, on social media. 

 All the influencers who spoke about the event have played their part in promoting this scam. And for that reason, the founders are slamming these influencers too. “Ankur Warikoo, I was your fan and looked up to you as a founder. I have now lost every bit of trust. It will be so so difficult to even trust anyone now,” Vaibhav Anant wrote on LinkedIn

 

But, how did the influencers get it all wrong?

 

“I believe where it all went wrong is that the Influencers’ manager or managing team was approached by the brand and they agreed to do it with little to no background checks on the company,” Sayan Sapui told WION upon being asked the same question.

 

“If they spent some time researching on the event company, their past events and whether there are any negative reviews on the internet, there could have been a chance they would have been able to save a lot of entrepreneurs from losing their money and time,” Sayan told further.

 

But make no mistake, the carelessness shown by the influencers, in this case, does make a good court case. The Consumer Affairs Ministry of India clearly states it is the moral responsibility of the influencers to verify the authenticity of the product they are promoting. An influencer can be fined up to 5 million rupees in case of failure to comply with the guidelines.

 

WION tried to reach Ankur Warikoo, MBA Chaiwala and Raj Shamani to know what they had to say in their defence. This is what Ankur Warikoo told WION:

 

“I am not involved in the conceptualising or organising of the event. We had done an Instagram collab reel on 19th January where I spoke about the importance of funding for a startup and how this event could be a good opportunity to explore the same and meet other founders.”

 

“The terms of the collab were clear that my video will not be used for promoting the event. However, I realised that this was not respected. While they took down ads of the video when we asked them to, the video was and is still being used on their website and in all of their communication,” he said.

 

“In January itself we distanced ourselves from the event. They repeatedly asked me to be present for the event, which we declined. As late as February, we had to keep sending them emails asking them to take down ads they were running to promote the event using my video,” he added.

 “It is really tragic to see how the event eventually ended up. It showed promise and could have genuinely helped founders if done the right way,” he pointed out.

 

MBA Chaiwala and Raj Shamani didn’t reply to the emails sent by WION.

In a nutshell,  Sayan Sapui recommends both influencers and entrepreneurs do their due diligence before signing up for such events.

 

“Take everything from TV ads to Influencers on Instagram with a pinch of salt,” Sayan said while addressing founders.

 

For influencers, Sayan has a simple yet powerful suggestion: Always put your credibility above all.

 

According to Sayan, “An influencer’s career is built on TRUST. And we all know it’s a very fragile thing, especially in the online world. As a startup/finance influencer, these online celebrities hold massive responsibility towards their audience.”