From Boom to Bust: Unravelling the Systemic Causes Behind Indian Startup Failures and Strategic Recovery Paths

By : Meghasham Chaudhari , Smrutiranjan Mohanty

Page No: 143-153

Abstract:
India’s startup ecosystem, though vibrant, faces an 80–90% failure rate within the first 3 to 5 years. While success stories dominate discourse, research on failures is limited. This study investigates systemic causes, strategic missteps, financial mismanagement, governance flaws, and ecosystem gaps, using a mixed-methods approach. Grounded in resource-based view, liability of newness, and institutional theory, it introduces the seven-pillar ‘STARTUP Recovery Framework.’ Beyond diagnosing failure, it offers actionable insights for entrepreneurs, investors, policymakers, and incubators. The study urges a cultural shift to view failure as a learning tool, presenting both a theoretical foundation and a practical roadmap to strengthen India’s entrepreneurial resilience

Authors:
Meghasham Chaudhari, PhD Scholar, Dr. Vishwanath Karad MIT World Peace University, Pune & Assistant Professor, School of Business, Indira University, Pune, Maharashtra, 
Smrutiranjan Mohanty, Associate Professor, School of Business, Indira University, Pune, Maharashtra
 

DOI: https://doi.org/10.32381/PROD.2025.66.02.05