Valuation obsession, investor pressure, and unethical practices by founders may be blamed for some of the recent misadventures of certain start-ups. They have, however, also taken the lid off the complex accounting practices and challenges these new-age ventures are just getting to grips with.
With so much money sloshing around the system, funding rounds got bigger and bigger. Critics say that left start-ups with money to burn and no need to show how they would ever turn in a profit.
“In the new-age economy, new business models are coming up. There is a lot of complexity around many areas, requiring significant judgement calls. People often go wrong with the right interpretation of accounting,” said a senior partner at one of the Big Four advisory firms.
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