Every mature startup ecosystem has eventually faced a period the venture community refers to, after the fact and usually with discomfort, as its accountability phase. The United States went through one in the early 2000s, after Enron, WorldCom, and the broader dot-com governance cleanup. China went through one in the late 2010s, when Luckin Coffee and a wave of regulatory enforcement actions reset expectations around financial controls inside high-growth tech companies. India entered one in 2022-2023. ASEAN is now entering its version.
I have spent 15 years inside Indonesian risk functions, and the structural patterns that produce accountability phases in startup ecosystems are not new to anyone who has worked in regulated finance. The governance gaps that surface during these moments are not technical failures. They are the predictable consequences of growth velocity outpacing institutional maturity.
The historical pattern
Three things tend to be true of accountability phases across mature ecosystems.
They follow rapid scale. Every ecosystem that has been through one entered the phase after a multi-year period of high-velocity capital deployment, valuation expansion, and founder-led decision-making. The governance infrastructure that should have accompanied that scale was outpaced by operational growth.
They surface in clusters. Accountability phases are rarely about a single company. They are about a cluster of disclosures, investigations, and resignations that arrive within 12 to 24 months of each other, often involving companies with overlapping investors, advisors, and audit relationships. The cluster reveals what individual cases sometimes obscure: the gaps were systemic.
They produce structural change. The ecosystems that handled their accountability phases best did not stop at prosecuting individual cases. They used the moment to install governance infrastructure (board independence requirements, audit committee standards, founder oversight mechanisms, investor diligence norms) that the previous era of growth had skipped.
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Why these phases happen
Three structural forces produce them predictably.
Velocity outpacing governance. Founders are trained to decide quickly. Boards staffed primarily by founder allies and friendly investors do not provide effective challenge. Audit committees in pre-IPO companies are often nominal. Internal financial controls grow more slowly than the revenue figures being reported. Each gap is individually defensible during growth. Together, they create the conditions for failures that only become visible when external pressure forces examination.
Diligence theatre. Late-stage venture investors, particularly in markets with limited public-company comparables, often run diligence processes that test surface metrics more rigorously than underlying operational reality. The same diligence playbook, repeated across deals and across investors, produces consistent blind spots.
Founder isolation. Founders of unicorn-scale companies eventually reach a point where almost everyone in their daily orbit benefits financially from the company’s continued narrative. The mechanisms that should challenge the founder’s interpretation of reality (independent directors, external auditors, internal risk officers with real authority) are often the same mechanisms that have been quietly weakened during growth.
What changed for the ecosystems that handled it well
Investor diligence standards reset publicly. The US after Enron, China after Luckin, India after 2022-2023: each ecosystem saw major institutional investors publicly upgrade their diligence frameworks. The new standards became the baseline, and companies that resisted them faced funding consequences.
Board governance norms changed. The composition, independence, and authority of pre-IPO company boards shifted meaningfully. Independent directors with real veto power became more common. Audit committees got teeth. Founder-CEO dual roles in companies above a certain valuation began carrying additional governance requirements.
Auditor scrutiny increased. The professional services firms that audited and advised during the growth phase faced their own accountability moment shortly after the founder cohort did. Standards tightened. The cost and rigour of independent verification increased.
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Lessons learned
Five principles from previous accountability phases are worth carrying into ASEAN’s current one.
The cluster will get bigger before it gets smaller. Accountability phases tend to surface 12 to 24 months of issues within a relatively short period. The ecosystem response is more durable if it treats the cluster as predictable rather than as a series of individual surprises.
Diligence framework upgrades are collective infrastructure. The fastest way to upgrade due diligence is for the largest investors to coordinate publicly on new standards. Individual firms upgrading alone get adverse selection. Coordinated upgrades change the market.
Independent directors are not luxury. Independent board seats with actual authority, not friendly investor representatives, are the single highest-leverage governance investment a unicorn-stage company can make.
Founder-CEO accountability needs explicit structure. The presumption that the founder will act in the company’s long-term interest is necessary but not sufficient. Specific mechanisms (board oversight, audit committee authority, risk officer independence) should be in place before they are needed.
Transparency is the recovery accelerant. The ecosystems that recovered fastest from their accountability phases were the ones where the institutions involved disclosed honestly and quickly. The ones that protected reputations through opacity recovered more slowly.
The macro stakes
ASEAN’s startup ecosystem has spent 15 years building. The capital deployed, the talent attracted, the regional infrastructure built, none of that is at risk from the current moment, unless the ecosystem responds to it with denial rather than with structural improvement.
The accountability phase, when handled well, is not a setback for an ecosystem. It is the moment an ecosystem grows up. The institutions that come out of it stronger will be the ones that treat the period as collective standard-setting rather than individual damage control. The question is whether ASEAN’s response will match the scale of what has been built.
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