Startup Funding and Work Culture: Does Money Matter?

Startups are frequently managed by a small team that collaborates closely. The "startup culture" is essentially a reflection of the founding passions and personalities of the team. Every person who works for the startup typically contributes to the culture as a whole. Some businesses have been able to change their cultures rather fast by defining a new set of behaviours that are expected by their employees, even though culture can take several years to passively grow. Sometimes, the journey from a chaotic startup to an organized corporate entity occasionally begins with investments or venture capitalists. These days, especially in the startup community, a lot of emphasis is being paid to the value of business culture. While small companies are altering the rules of office culture with advantages like unrestricted vacation time and flexible hours. Global tech giants have built a reputation for themselves by providing their employees with distinctive, occasionally opulent benefits. For a growing startup, all of this is only possible with the financial support of angel investors and venture capitalists.

Is Money a Tool Only?

Smart Money and Monitoring are critical components for the growth of startups

What does "smart money" means? This means that when a startup or business receives VC money, the capital also includes the venture capital firm's knowledge. VCs typically invest in industries and themes that they are knowledgeable about; some of them have partners who have previously successfully left their company (like Impact Ventures in social enterprises, EdTech or Assistive Tech). Because of this, they can offer seasoned guidance on how to grow the business, how to handle common or more serious issues, or how to keep monitoring financial performance. Such veteran people who successfully left or parted with their businesses have turned into angel investors and give guidance on –how to invest in startups. When VC firms invest in startups, founders have access to all of their expertise and knowledge, which may be of tremendous value, particularly in the early stages or growth phase. VCs are subject to the same strict rules as other forms of private equity investment from regulatory organisations. They also ensure that the leadership team have open and honest conversations within their company. Finally, smart money and monitoring lead to the creation of a robust work culture where each team member or employee is encouraged to contribute to the mission and vision of the organisation.

Tenacity of Team

Teamwork and work Culture determine both investment flow and success of startups

Startup funding contributes to creating a great team that is an important and integral component of a robust work culture. In turn, robust teams and work culture are also critical components for VC firms to invest in startups. It is also widely admitted by venture capitalists and angel investors that financial resources backed by a solid business model can create a robust work culture that ensures growth and success. Investment firms in India also make a deep assessment of teams and work culture before taking a final call to invest. Robust work culture is a tangible asset in building a successful startup. A robust work culture makes people free from the stress of uncertainty, lack of required expertise, heavy workloads, and frequent shifts in goals and progress. It creates a supportive and collaborative work environment where every member does his or her part while supporting one another and working towards a common goal. It also minimizes the risk factors including a higher rate of attrition which is considered very high in tech companies across the globe.

Does Money Matter?

With handsome financial packages and incentives, startups allow teams to work freely and creatively

Open work culture combined with a handsome pay package makes startups attractive to young professionals. It is being witnessed by the industry and institutions that students are equally inclined towards startups in comparison to big companies or MNCs. In the Indian context, as per media reports, at premier tech tuition- Birla Institute of Technology and Science, Pilani- 200 students, out of 400, appeared for job interviews with startups in the last academic session.

VC firms and angel investors have been eager to invest in Startups India, especially in the e-commerce, cloud computing, fintech, and analytics segments. These sectors are getting adequate funding and are in a growth phase. Hence, they offer an attractive package to fresher. In the growth phase itself, these startups evolve a work culture that not only attracts talent but also trains them well for the future. With handsome financial packages and incentives, startups also allow their teams to work from home or remote locations. In such robust work culture, teams not only get an opportunity to become creative but can also maintain a better work-life balance.

Success is Supreme

The success rate of Startups India, with its transformative work culture, is higher than in the rest of the world

In the aftermath of two years of the work-from-home phenomenon, India's startup ecosystem has now been spearheading a transformation in the job market with an easier work culture and better employee policies. India has now over 84,000 startups and their innovations attract robust funding in the growth phase. With adequate startup funding, they are offering relatively higher salaries, employee stock options, and other incentives. With such incentives, they have created a work culture that ensures their success. The government of India recently boasted that the success rate of startups India is relatively higher than in the rest of the world. This success is primarily a by-product of robust work culture that is capable of leveraging a number of initiatives undertaken by the government.

The Disruptions

Robust work culture is disruptive and unleashes employees’ potential which contributes to the growth of startups

The robust work culture helps startups in getting projects and assignments delivered on time without compromising quality. In the new normal the ‘Boundaryless Workplace’ model was also adopted by well-funded startups and that ensured their employees can work from anywhere around the world. It busted a myth that the virtual work culture was not possible in a startup ecosystem. Now, along with on-site, hybrid work culture is also gaining momentum.

Notwithstanding the importance of startup seed funding, it is now proven that business growth essentially depends on a resilient and productive workforce and culture. To create a robust work culture, founders need to ensure employees’ psychological and physical safety. A robust work culture unleashes employees’ potential that contributes to the growth of startups.

Founders of startups mainly come from premier tech and business institutions. Founders have more confidence in their juniors as team members who can adapt and adopt evolving open work culture in their new setup easily. Ease of working is part of the startup work culture.

Finally, with regard to the talent pool, startup seed funding has disrupted the demand-supply equilibrium and it has a bearing on the overall growth of the companies in general. Learning from the startup ecosystem, the industry has now been focusing on creating a robust work culture similar to new companies.

JC Team Capital is a Canadian based venture capital firm that provide seed funding to early-stage startups to take the businesses to the new heights.