Freshworks boss bats for founders taking money in secondary sale
Girish Mathrubootham, the founder and Executive Chairman of Freshworks, has endorsed the idea of start-ups founders participating in secondary share sales. Expressing his views during a panel discussion at the Moneycontrol Startup Conclave in Bengaluru, he said it allows them to meet important personal financial needs, and enables them to focus on building and growing their companies. Mathrubootham believes that secondary sales can be beneficial for founders, particularly those from middle-class backgrounds who may not have had significant financial resources.
Mathrubootham's perspective
Mathrubootham stated, "Most of us come from a middle-class background. We have not seen enough money in life." He further explained that when an offer to buy their stake for millions is made, it is often perceived as a great outcome but warned that this could be misleading.
Secondary sales can aid personal financial needs
Mathrubootham suggested that founders should consider taking some money from secondary sales as their company grows. He believes this strategy could help them manage personal expenses such as home loans, and allow them to focus more on their business expansion. "I'm an advocate for founders to take some money from secondaries when their company is scaling," he said during the panel discussion.
Debate over secondary sales among investors, founders
The practice of founders selling their shares in secondary sales has sparked a debate among both investors and start-up founders. This trend is becoming increasingly prevalent among several new-age companies. Notably, Mamaearth's founders Varun Alagh and Ghazal Alagh sold roughly 32.86 lakh shares of the 10.67 crore shares they originally held in the company. Meanwhile, FirstCry's founder and MD, Supam Maheshwari, offloaded shares worth ₹300 crore before filing for IPO in January.
