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The world today is changing rapidly with artificial intelligence (AI) emerging as the driving force, and startups that are agile to the changes will emerge successful, according to two leading venture capitalists.

The panel discussion on “Beyond the buck: Building future-ready biz” at YourStory’s flagship event, Tamil Nadu Story 2024, saw Chiratae Ventures co-founder T C Meenakshisundaram and The Chennai Angels Executive Committee member and former Cognizant CEO Lakshmi Narayanan elaborate on what startups can do to emerge as winners in this challenging environment.

Meenakshisundaram was clear on how to build future-ready businesses, “Any business that does not adapt AI will not exist after.” He believes that AI is a major pull today for startups to get funding, attract talent and tap into new businesses.

Meanwhile, Narayanan feels the key to success is the agility to change as things change in the marketplace.

He further elaborated on how technology is now a given and businesses will need to morph as things change, and was of the opinion that segments like healthcare, medical technologies, renewable energy, space and hi-tech are high-growth areas of the future.

Narayanan also believes continuity and change will co-exist, providing the example of India’s information technology (IT) industry, which has created numerous business segments like staffing, IT services, and other tech-enabled services. In each of these changes, organisations retained some part of the business while at the same time tapping into newer opportunities.

The need of the hour for startup founders is to have the resilience to build a business.

“Unicorn is just a milestone and the end goal should be in creating a long-term sustainable organisation,” Meenakshisundaram said.

He believes that an entrepreneur can only be successful with a long-term mindset, as there is a lot of enthusiasm while starting a venture, but it is resilience that will help in going the distance.

Startups today are also facing the challenge of a funding winter where it is difficult to raise capital. According to Narayanan, funding is always a stage-by-stage process, where you first approach like-minded individuals who might support the ideas, then go towards angel networks.

“It is important to stay engaged with those people who are your long-term supporters. If one follows this path then one can secure funding for a longer period,” he remarked.

According to Meenakshisundaram, there are two types of businesses which will get funded in the current context—the profitable startups, and those where there is a strong possibility of churning out a profit in six to 12 months’ time.

“We are going through a situation where money has got a real cost,” he remarked, referring to prevailing high interest rates which has made raising capital costlier.

On how governments can encourage the startup ecosystem, both the speakers said there are already quite a few initiatives which are having a multiplier effect, with focus on segments like biotech and drones.