Stayzilla Co-founder’s Sorry Saga; Getting Arrested, Kids Being Threatened With VooDoo Dolls!

Just like a kaleidoscope, there exists several aspects, layers to entrepreneurship. Some are good, some are bad, and some are downright evil. One such extraordinary aspect was witnessed in the last 24 hours, when a co-founder of a failed startup was arrested for defaulting on payments.

And to get worse, another co-founder’s kids were threatened with VooDoo dolls.

Love or hate it, this is entrepreneurship, and on a closer look, we will derive that something is terribly wrong here.

Stayzilla Co-Founder Arrested For Defaulting On Payment

Last month, Stayzilla, India’s largest homestay centric startup abruptly shut down its operations. Their co-founder Yogendra Vasupal explained the reasons for the same and promised to bounce back with a renewed focus.

However, once a startup closes down, it has pending payments to their vendors, partners and customers, and it seems Stayzilla didn’t have a plan to make these payments. Or rather, they needed some more time.

But one of their advertisements partners, Jig Saw Solution & Advertisement from Chennai couldn’t wait any longer. They had a pending payment of Rs 1.56 crore from Stayzilla. Using their political connections, they somehow convinced Chennai police to visit Bengaluru and arrest Stayzilla’s co-founder Vasupal.

Vasupal’s Cry For Help Via Blog Post

Meanwhile, before getting arrested, Vasupal wrote a detailed blog, wherein he explained the harassment experienced by his family due to unpaid dues and pending payments. This blog was published by his wife yesterday early morning when Vasupal’s whereabouts were not being known.

He had simply disappeared after Chennai police came to his house.

In the blog post, he shared that Stayzilla co-founder Sachit’s family was being threatened with abuses and VooDoo dolls. And he shared the desperation.

The Other Side of The Story

Jig Saw Solution & Advertisement firm, which is demanding the pending payments of Rs 1.56 crore from Stayzilla has claimed that Vasupal and Sachit, both the co-founders of the company, had deliberately and intentionally delayed his payments, even after repeated reminders.

Aditya, owner of Jig Saw said, “These startups get funding, they spend carelessly, they live a hunky-dory life and keep our payments on hold, and then shut shop saying we don’t have money. People doing genuine business like us have to bear the brunt,”

He also showed proof that Stayzilla had previously approved all the advertisement related tasks done by his company.

Entrepreneurs Rally Behind Stayzilla Co-Founders

In a show of solidarity and support, several entrepreneurs expressed grave concern over this issue and asked the relevant authorities to solve this issue.

Flipkart co-founder Sachin Bansal said, “Let the law take its course, but intimidation of #stayzilla founders crosses a line. It’s unhealthy for entrepreneurship in India..”

Let the law take its course, but intimidation of #stayzilla founders crosses a line. It’s unhealthy for entrepreneurship in India. (1/2)

— Sachin Bansal (@_sachinbansal) March 15, 2017

Snapdeal co-founder Kunal Bahl said, “Many startup founders, including myself, have seen the ugliness of getting on the wrong side of people with bad intentions. #stayzilla”

Many startup founders, including myself, have seen the ugliness of getting on the wrong side of people with bad intentions. #stayzilla

— Kunal Bahl (@1kunalbahl) March 15, 2017

Nasscom Board Member Ravi Gururaj said, “Disappointed + distressed @ heavy-handed tactics against @YogiVasupal Stayzilla. Totally unacceptable. Alerting authorities requesting help!”

Disappointed + distressed @ heavy handed tactics against @YogiVasupal Stayzilla. Totally unacceptable. Alerting authorities requesting help!

— Ravi Gururaj (@ravigururaj) March 15, 2017

Meanwhile, Karnataka State IT Minister Priyank Kharge assured that they are talking with Chennai police authorities to help Vasupal. He said, “Spoke to Dr Manikandan, IT minister for his intervention in @stayzilla case, I am sure he will help if @YogiVasupal is on right side of law..”

Our Opinion

Financial liabilities and pending payments in the case of a shutdown of a startup is a civil case, and it should be treated like that only. Involvement of Crime Police into this issue and the sudden, abrupt arrest of Stayzilla co-founder is an uncalled for action, and we strongly condemn it. Besides, using VooDoo dolls, violence and abuses for collecting payments is a sick mentality, which should be actually treated like a criminal case.

Having said that, founders of startups should take responsibility for their actions, and ensure that failure of their dreams doesn’t cause financial harm to their partners and vendors. As shared by Aditya, after receiving funding, some entrepreneurs start living an extravagant life, spending VC money like their own. In this case, Aditya has even alleged that Vasupal and Sachit had transferred company’s money into their own personal accounts. Besides, we have read several complaints by Stayzilla’s home stay partners and former employees as their payments are still pending.

We witnessed similar complaints against Snapdeal as well when they fired several employees and stopped paying their vendors.

Issues such as these should be sorted out with civility and respect, both the parties should be responsible for their actions. Law must take its course, and the truth should be revealed.

We will keep you updated as we receive more updates on this case..