Entrepreneurs around the world pay a price when their ventures fail, from lost fortunes to tarnished reputations. But in India, one startup founder has been hit with a particularly harsh penalty after his company’s demise: He’s in jail for not paying money to one of his suppliers.

Yogendra Vasupal, or Yogi as he is known in startup circles, had founded Stayzilla, a marketplace that lets homeowners and renters find each other online. The startup struggled against tough local competition and Airbnb Inc., closing its doors in February. Yogi was arrested by police last week for allegedly owing an advertising firm about $260,000 (£208,249).

“If ever there’s a right to be an entrepreneur, that’s clearly been violated. Period,” reads the letter, which is addressed to India’s home and commerce ministers among others. “The question is not how this will affect entrepreneurship today, but how young Indians looking to become entrepreneurs in the future will give up even before starting up.”