Not How Fast But How Long They Live

The themes of innovation, governance, and entrepreneurship are further reinforced by another quarter of inadequate funding for startups, with a clear preference for early-stage funding. There has been a considerable improvement in investor discipline since that venture capital is not actively seeking for companies with early exit. There has been some success in removing valuation froth thanks to the regulatory structure. The Indian startup ecosystem is becoming more robust as a result of all of these factors. The country's relative stature in the global sweepstakes has not diminished, and if the private equity drought ends, it will have a decent chance to pioneer new technology frontiers, such as generative AI.

Investors looking to hasten the adoption of AI in various economic processes will propel the next round of startup funding. When compared to other technological cycles, AI's ability to disrupt and generate value is more faster. Investors will shift their attention from Big Tech providing useful tools to a far broader group of innovators who will work to increase economic output, coinciding with a new spring in startup investment. Given its large technical workforce, India is anticipated to make a substantial contribution in this area. In an effort to smarten up millions of company operations, entrepreneurs will spearhead the disruption.

Some of India's most successful startups, including those in the edtech and fintech industries, have been caught red-handed due to poor corporate governance and business practices as a result of the current funding crunch. On top of that, it has exposed the enormous financial losses suffered by Indian unicorns due to their obsession with growth. These days, while deciding how to allocate funds, profit (or rather, the means to achieve it) takes center stage. This isn't about how quickly unicorns are appearing in India; what matters is how long they stay. Startup founders from the younger generation should be more likely to prioritize innovation over other aspects that drive their business. Startups are more vulnerable to the kinds of business shocks that established organizations don't have to worry about as much if they stick strictly to corporate governance. The subsequent feast will be a cakewalk for those who made it through the hunger.

https://economictimes.indiatimes.com/epaper/delhicapital/2024/mar/28/et-edit/not-how-fast-but-how-long-they-live/articleshow/108830104.cms