KL20: Dr V Sivapalan on changing the startup narrative, building enduring companies, and nation buildingFundraising today favors the financially robust and capital efficient startups, Chairman & Senior Partner of Soonicorn Collective & ScaleUp Malaysia, at his presentation on 23 April at the KL20 Summit. It was a stark reality check for founders.
But there is one problem with this. “This narrative is fraud,” he said, elaborating that there aren't many companies within Malaysia or even among its neighboring countries that have done this successfully. Plus, most businesses know that M&A fail most of the time, so hardly anyone in Asia buys this narrative.
Even in the US, where many companies have very strong balance sheets and very high profits, getting acquired isn't common., showed that even in the US, where we are led to believe that startup acquisitions happen all the time, significant M&A activity only happened in seven quarters between the 2016 to 2023 period. In every other quarter there was very little M&A activity.
Rejecting the raise and flip game, Sivapalan instead suggested founders consider the IPO route, pointing out that some of the world’s top tech companies took this route. This is the route to building a lasting business, he said.