Pallav Nadhani, who founded the charting company FusionCharts in Kolkata in 2002, shifted to Bangalore in June 2011. He found the work ethic in Kolkata poor: people were not aggressive; at the stroke of 5 employees would leave work; very few took initiatives; most had to be told what to do.

"In contrast, in Bangalore people learn things on their own," says Nadhani, whose solutions are used by 21,000 customers — including Google, HP, Dell, Nasa, Intel, Microsoft, Facebook, IBM and Disney — and 4,50,000 developers across 118 countries.

He says Bangalore is easily the intellectual capital of India: "The weather's good. As an entrepreneur, I get nice vibes, and don't feel isolated as there are so many other entrepreneurs to interact with."

A combo of four things — Bangalore's IT services pedigree, diverse talent, linkages with the Silicon Valley and entrepreneurial culture — has made the city the start-up capital of India.

Good entrepreneurial culture aiding Bangalore

The global research firm Startup Genome last year placed it among top 20 influential startup ecosystems around the world, a list that was led by the Silicon Valley, Tel Aviv and Los Angeles; the list had only one other Asian country , Singapore.

In August, MIT Technology Review, a magazine on innovation brought out by the Massachusetts Institute of Technology, placed Bangalore among the eight largest technology innovation clusters around the world, driven among other things by its entrepreneurial culture.

"The city's Silicon Valley tag and the opportunities it created led to talent migrating to the city. A good number of angels (early funders), venture capitalists and private equity players also moved to India to participate in the city's burgeoning startup act," says Lalit Ahuja, founding partner in Kyron, a startup accelerator.

Mukund Mohan, CEOin-residence at Microsoft Ventures, notes that three key elements go into creating a great entrepreneurial ecosystem: access to a great talent pool, access to investment capital, and access to a large pool of early adopters. "Bangalore has all three in good numbers.

The city attracts good talent because of great weather, job options, and a cosmopolitan and welcoming culture. The city has a great set of entrepreneurial talent, and there are investors with experience to help guide you," says Mohan, whose venture is one of the biggest startup accelerators in the city, providing software too ls, mentorship and access to innovative startups.

It's difficult to find a reasonably accurate estimate of startups in India. But of the 4,000 applications that Nasscom received recently from startups for angel funding and acceleration under its 10,000 Startups initiative, the highest (23%) was from Bangalore, followed by NCRDelhi (20%). But places like NCR are better known for ventures in the internet space. "If you look at hardcore product companies (which require strong engineering talent), Bangalore is way on top," says Arun Natarajan , founder of Venture Intelligence , which provides information and analysis on private equity and venture capital funding.

Venture Intelligence data shows that Bangalore, at $164 million, received the highest amount of earlystage venture capital funding in 2012, with NCR following at $106 million. A survey last year by YourStory.in, a startup research firm, found that Bangalore was perceived as the best city to start up in by over 34% of 400 respondents , followed by Mumbai (20%) and NCR (9%). Startup networking forums Open Coffee Club, Bar-Camps , Startup Saturday and Mobile Monday have played a key role in providing mentorship and encouragement to startups.

Krishna Mehra, who cofounded the start-up Capillary Technologies with Aneesh Reddy in 2008, ran into a Qualcomm executive at an Open Coffee Club event in Bangalore. The executive suggested to Mehra that they apply for Qualcomm Ventures' seed investment competition , QPrize. They did, won, and attracted attention to themselves in a way that no amount of marketing could have.

"But for Open Coffee Club, we would never have thought of applying for QPrize. We miss such events in places outside Bangalore ," says Reddy, whose company now has offices in eight countries, including the US, the UK and Australia.

Bangalore's steady realestate prices have also played a role in encouraging startups. Startups can find very affordable spaces even in city centre locations like Indiranagar and Koramangala . "You can't imagine that in a place like Mumbai," says Manish Sabharwal, founder of staffing solutions firm TeamLease.

But Bangalore's startup ecosystem still has a long way to go to reach the standards of innovation and dynamism of, say, the Silicon Valley. Capillary's Reddy says good product managers and marketing/sales guys are still difficult to find in Bangalore. His cofounder Mehra has moved to the US to be closer to their main market and acquire talent there.

Rohit Nadhani, founder of CloudMagic, which indexes data from a bunch of services , has also moved to the US, though his engineering team remains in Bangalore. He says his primary market is the US, and physical proximity helps in understanding customer behaviour better . The companies whose services he bunches are based in the Silicon Valley, and it's far easier now for Nadhani to conduct business development meetings with them. "We are raising money from US investors, who prefer investing in US companies. There is also a strong culture in the Valley to help upcoming entrepreneurs ," he says.