professional managers | wealthymatters

Alok Kejriwal On The Different Shades Of Money.

August 1, 2012 2 Comments

wealthymatters.com

Some interesting observations from Alok Kejriwal :

“After my first round of VC funding, I ran into my uncle at a dinner. He had read about the financing in media and cornered me. ‘So you’re rich! Why are you looking so gloomy?’ he said. ‘Huh’ I asked? ‘My Company’s the one that got funded, not me! No one got rich. The VCs got poorer and a long arduous road lies ahead of me to return the money to the VCs many times over’. He chuckled and said’ ‘What nonsense! The first rule of the funding game is to siphon out 25% of the funds and make yourself-rich. Investors can be dealt with later’. Shucks… hadn’t I heard that story before? Many of my relatives have floated public issues that were nothing short of scams and they still boast about it!

This ‘get rich, siphon out’ philosophy left so many old industrial houses bankrupt. They were never capitalized to take advantage of acquisition opportunities and punished their shareholders so harshly that they could never raise capital again. Think Mafatlal, Dalmia and many more. Even today I meet embarrassed professional managers working in ‘family’ firms who get paid salaries in ‘half white and half black’ to avoid taxes! Read more of this post

Filed under Entrepreneurship, Paper Assets Tagged with Alok Kejriwal, Bajaj, balance sheet, black money, cash war chest, Corus, Dalmia, empire, family firms, Fiat India, Hindustan Motors, Income Tax rate, Indira Gandhi emergency tax regime, investors, IPO scams, Jaguar and Land Rover, Mafatlal, massive cash reserves, Mittals, Nano, postaday, professional managers, punishing shareholders, raising money, Ruias, siphoning off money, Tata, TCS, Telco, TISCO, VC, VC funding, venture capitalist, white money

Harsh Mariwala On His Family Business

July 15, 2012 Leave a comment

Professional managers can help family businesses grow: Harsh C Mariwala, Chairman & MD, Marico

I joined my family business in 1971. My family, a large joint one, owned diverse businesses collectively managed by family members. The businesses ranged from trading to manufacturing, but none leveraged any significant brands. In this backdrop, I strived over the subsequent two decades to create a distinct identity for a successful brand-basedFMCG business.

Still, in 1990, when we carved out the FMCG business into a new company called Marico, it was a leap of faith for me personally and a quantum jump for the business, which then had a turnover of Rs 80 crore. The separate corporate existence did impart a sharper focus and enhanced the growth potential. But it also held out a challenge — how would a new, unknown company attract talent? Read more of this post