In the colourful world of Indian start-up where innovation meets aspiration, the goal turns out to be direction less towards valuation. Start-up CEOs often seek the next funding round, hoping for a better valuation to attract interest and money. Still, in my case as a mentor in a venture capital firm it is my opinion that it should be more about value-add process rather than valuation. It is time to discuss why value creation is critical and how start-ups can focus on this critical factor of value creation successfully.

Understanding Value Creation
Value creation is the act of deriving useful and valuable services, goods, and solutions for customers, businesses, and communities, as well as improving the way those targeted entities generate, deploy, and capture value. The two represent two different approaches to developing a company that is not only financially profitable but also economically responsible for creating value that encompasses the business environment surrounding it. Valuation, on the other hand, in most instances, is a figure on perceived market price, investor sentiments and expected earnings. People get thrilled when they see high valuations but these are not always an indication of steady and profitable businesses.