This study investigates the extent to which the Karnataka Startup Policy (KSP), launched in 2015 and revised in 2022, has driven startup growth, improved funding access, and boosted job creation in Bangalore, the epicentre of India's startup ecosystem. Bangalore hosts over 13,000 DPIIT-recognized startups as of 2025 (Department for Promotion of Industry and Internal Trade), contributing significantly to India's $500 billion digital economy goal by 2030 (NITI Aayog). Amid national initiatives like Startup India, the KSP offers incentives such as seed funding, tax rebates, and incubation support to address persistent challenges like funding gaps (with only 20% of startups securing VC in 2023) (NASSCOM) and high failure rates (over 90% within five years), (CB Insights). Understanding the policy's impact is crucial for refining state-level interventions, as Karnataka accounts for 35% of India's startup funding despite comprising just 5% of its population (Karnataka Startup Cell), yet job creation lags behind ecosystem growth.

The research employs a mixed-methods approach, combining quantitative econometric analysis of panel data from 2015–2025 with qualitative insights from stakeholder interviews. Secondary data sources include DPIIT startup registries, NASSCOM reports, Crunchbase funding records, and Karnataka government metrics on 5,000+ policy beneficiaries versus a control group of non-beneficiary firms. Difference-in-differences (DiD) models assess causal impacts on key outcomes, controlling for national trends and economic shocks like COVID-19, while 25 semi-structured interviews with founders, investors, and policymakers provide contextual depth. This design ensures robust attribution of policy effects amid Bangalore's volatile tech landscape.

Key findings reveal moderate successes: KSP boosted startup registrations by 45% (from 2,100 in 2015 to 13,500 in 2025) (Department for Promotion of Industry and Internal Trade) and funding access by 28% for beneficiaries via programs like Elevate (disbursing ₹500 crore) (Karnataka Startup Cell), yet only 15% of funds reached early-stage ventures outside IT (Crunchbase). Job creation grew 32% faster in policy-supported firms (averaging 150,000 new roles annually) (NASSCOM), concentrated in tech services. However, disparities persist for non-metro and women-led startups. Overall, the KSP has catalysed ecosystem scale-up but falls short on inclusive growth and sustained funding, implying a need for targeted reforms like sector-agnostic grants to maximize socioeconomic returns.