India's startup world has an abundance of skilled tech workers to choose from, firmly established angel networks and a growing venture capital industry.
But last year turned out to be the worst year for Indian technology IPOs since 2001. Two new listings were announced, with a combined value of just $5.7 million. Much of the explanation can be found in circumstances beyond the control of entrepreneurs.
"Stock market volatility has made IPOs very difficult to time, as companies looking to go public don't have a window of certainty to go out and price themselves," said Alok Mittal, Canaan Partners's head of Indian investments. "We haven't had a two- or three-month period of stabilization for some time."
Not helping the current uncertainty are the national elections in the world's largest democracy, due in the middle of the year. Even if the outcome heralds a new period of increased stock market stability, budding IPOs still face cultural obstacles.
The value-driven mindset of Indian stock market investors is ill-suited to the typically unprofitable, high-risk nature of tech startups.
"In instances where high growth, low profitability companies have listed, there aren't many examples where money has been made," Mittal said. "If the Indian IPO markets diversify to new global investors, it would be a big catalyst for unprofitable companies making their public debut."
Indian authorities, often criticized for over-regulating, are in this case relaxing the rules. Last June, the Securities and Exchange Board of India approved a proposal allowing startups to list without actually raising any money from the public.
The move could see India emulate the success of London's junior stock market AIM, and in the process, give angel investors and venture capitalists a greater means of exiting their investments.
"The change will help get money into the system and grow companies quickly," said Padmaja Ruparel, president of the Indian Angel Network. "It will move companies to the IPO stage faster."
Startups may also get a boost from the growing adoption of smartphones. So far, of the 81 percent of Indians aged over 16 who use a mobile phone, only 10 percent have a smartphone, according to a report by Nielsen in February 2013. But as the cost of the devices drop, Ruparel expects a proliferation of smartphones to drive a pickup in listings of Internet and other consumer tech companies that are geared to ride that wave.
Another reason for optimism is the "reverse brain-drain" of young Indian professionals. With India's economy still growing amid a global economic downturn, an increasing proportion of the country's entrepreneurs are now returning natives, according to angel investor Hemant Kanakia. They're bringing with them a top education, or skills and contacts acquired working at the Microsofts or Apples of the world.
This trend is driving a "quantum jump" in the quality of companies popping up on the Indian tech scene, Kanakia said.
"If big tech companies see founders have worked for Google for seven years before coming back and starting their venture, then they're going to be much more comfortable acquiring them," he said.
A case in point is Facebook's purchase of Little Eye Labs, a mobile app startup whose seven-person team boasts former employees of IBM and Google.
The deal has excited many in the Indian startup community. And not because it's Facebook.
"To date, we haven't seen many deals of $10 million to $20 million in the Indian market -- either the company is acquired for a hundred million bucks, or it just trudges along," Mittal said. "People are looking at Little Eye Labs and thinking, 'We can take more risk, because even if this doesn't go all the way, we can still reach a positive outcome.'"