“Startups around the world have ignored this asset…” says Zerodha founder Nithin Kamath.

“Startups spend a lot of effort and money on marketing. But B2C startups around the world that have gone public in the last few years have turned millions of social media influencer retail shareholders into brand ambassadors. I think we’re ignoring one of our greatest assets: opportunity,” the stock market firm’s CEO said in his linked-in post.

There’s been a lot of talk lately about new-age technology companies considering high valuations when launching initial public offerings (IPOs), and then stock prices not doing so well. The latest company to go the IPO route is Mamaearth, which has faced backlash on Twitter for its high valuation. Stocks like Nykaa and Paytm face a lot of volatility, keeping long-term investors, especially retail investors, at bay.

Also Read: Mamaearth’s Ghazal Alagh Dispels IPO Valuation Concerns

To take advantage of the opportunity to turn shareholders into ambassadors, companies must create wealth with minimal volatility by maintaining appropriate expectations, being transparent and not overselling their shares. Yes, suggests Nithin Kamath.

He also noted how raising money from venture capitalists and private equity puts pressure on startups to “think about maximizing valuations.”

“This means building a narrative that can present the best results for your business. But what it takes to be a successful public company is different. It’s about building wealth. Sharp declines tend to make retail investors uneasy.They panic and exit at a low price,” said Nithin Kamath.

Nithin Kamath talks about declining stock volatility

“Setting the right expectations, being transparent, and not overselling are great ways to reduce pre- and post-IPO share price volatility,” suggests Nithin Kamath.

We believe that by simply following these steps, “shareholders will feel like owners and will help reduce the biggest cost of any B2C business: customer acquisition costs.” Short term for underselling and overdelivery.

Nithin Kamath, an engineering graduate, founded Zerodha Brokerage in 2010 as a young trader with his brother Nikhil Kamath. He started investing in his stock market at the age of 17. His Nithin Kamath, who lost all his savings in the market crash of 2001-2002, faced some challenges before starting Zerodha.

Currently, his firm functions as one of the largest stock brokers in India in terms of active private clients. The company serves more than 10 million of his customers in the retail trading market, his official website claims. Zerodha also runs several popular online education and community his initiatives in retail trading and investing. His Rainmatter at Zerodha has invested in various fintech startups for the growth of India’s capital markets.