Entrepreneurship And Corporate Governance: Maintaining Control
The relevance of corporate governance within the entrepreneurial ecosystem is highlighted by the exponential increase in the number of startups, with approximately 100,000 being recognised as of July 2023. Moreover, in the quick-paced world of contemporary business, the essence of entrepreneurship goes beyond mere invention. The delicate balance between founders and investors might tip due to a deficit in either of these values, just like in any tense relationship.
Difficult Entrepreneurial Waters
Whether it’s the current era or any previous one, business owners and entrepreneurs had to embark on a path full of challenges and threats. And, this race can occasionally get overpowering, from securing the following round of venture financing to outperforming rivals. The challenging waters in the path include Unpredictable policies, competitors, fluctuating markets, continuously changing customer behaviour and preferences and more.
While this challenge temporarily places an impact on external stakeholders, internal teams constantly live in terror that the house of cards will eventually fall apart. A setting with demotivation not only lowers the morale of entrepreneurs but also shakes the foundation of business.
The Functions of Entrepreneurs and Investors: A Double-Edged Sword
Entrepreneurs unquestionably control the rudder, steering their ship through difficult seas. In this situation, the necessity of keeping investors as a compass for direction is crucial in order to reduce dangers. The fiduciary role of the investors extends beyond only supplying funds. They must make sure the businesses they support follow ethical governance principles. With careful diligence, this responsibility starts from the very beginning.
Some people may even put up with poor governance in their pursuit of an excellent Internal Rate of Returns (IRR). These mistakes can affect both the startup’s potential and the investor’s reputation. To overcome this, the entrepreneur and investor should be the two wheels of vehicles.
The Final Way
Entrepreneurship is an adventure full of dangers, risks and rewards as well. A venture’s future is heavily influenced by its founders and investors. It is not the sole responsibility of one side to ensure openness, accountability, and moral behaviour. Therefore, to keep a business stronger, and face difficulties, honesty and dedication are the keys to successful entrepreneurship.