bengaluru almost twothirds of 100 venture capital vc investors 64 polled in an ibm study claim unethical business conduct is a major reason for startups failing in india in response entrepreneurs and industry experts argue that the issue is not so much to do with unethical business conduct but more about poor corporate governance due to entrepreneurial inexperience underscoring the often fractious relationship between investors and founders in indias vibrant but still nascent startup sector the study titled entrepreneurial india how startups redefine indias economic growth was commissioned in the second half of 2016 it had about 1300 indian respondents around 600 of whom are entrepreneurs and another 100 venture capital investors apart from leaders in enterprises government and academia the ibm report cited misreporting of financial and other data misrepresentation of financial plans or achievements and ignorance of regulatory requirements as factors of unethical business conduct over 3000 startups have been funded in the past five years private equity and vc funds have infused more than 22 billion of capital into india since 2006 according to startups analytics firm tracxn thinking of that money as their own as opposed to taking care of it because the capital is vested in a company or to build a certain technology affects the organisation and how people are treated said nipun mehrotra chief digital officer ibm india and south asia tracxn estimates that over 212 startups shut down in 2016 a 50 increase as compared to the previous year senior entrepreneurs and indiabased investors that et spoke to contested the charge of unethical business conduct and believed founders require more mentoring sameer nigam founder of digital payments venture phone pe which is a part of indias most valuable startupflipkart said a lot of founders are engineers who need mentorship and support in areas like accounting and finance nigam is the founder of usbased startup mime360 meena ganesh cofounder of investment firm growthstory which has backed companies like healthcare venture portea and food portal freshmenu said lack of experience in founders may affect their judgement citing the difference between booked revenue based on orders and accrued revenue based on business serviced firsttime businessmen find it hard to understand the difference in applying the right accounting minutiae