Rural entrepreneurship could be the solution for the problems of poverty, migration, economic disparity, unemployment and underdevelopment associated with rural areas and backward regions. Previous literature on rural entrepreneurship is mostly focused on European countries and on the USA. Some work has been done in Indian settings which is mostly focused on South India, but those results can’t be generalise for hilly districts which have a very tough geographic location. The objective of this study is to find the factors which affect rural entrepreneurship in hilly areas. Qualitative content analysis and thematic analysis were used to serve this purpose. For this study, 15 successful rural entrepreneurs were interviewed from the hilly state of Uttarakhand, India and thematic analysis was performed on their responses. Results revealed various motivating factors for rural youth to become an entrepreneur. The major problems and challenges faced by a rural entrepreneur while starting a new venture were transportation cost, lack of skilled labour, choosing a place for doing business, financial problems, etc. The results of this study might benefit the existing body of knowledge and could serve as a guide for future research in the area of rural entrepreneurship.