Start-ups to get more money as Cabinet gievs nod to Rs 1k cr fund

Source: Business Standard, Mar 23, 2017

New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved Rs 1,000-crore initial corpus for the Fund of Funds for Start-ups (FFS), which was established in June last year.According to the Cabinet decision, Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in start-ups.

It was also decided that operating expenses for carrying out due diligence, legal and technical appraisals and convening meeting of Venture Capital Investment Committee, among others, would be met out of the FFS to the extent of 0.50 per cent of the commitments made to AIFs.

“This will be debited to the fund at the beginning of each half-year, i.e. April 1 and October 1,” an official statement said here.

The Union Cabinet in its meeting held on June 22 last year had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs 10,000 crore, with contribution spread over the 14th and 15th Finance Commission cycles based on progress of implementation and availability of funds.

It was decided that the FFS shall contribute to the corpus of AIFs for investing in equity and equity-linked instruments of various start-ups at early stage, seed stage and growth stages.

The FFS is being managed and operated by the Small Industries Development Bank of India (SIDBI). It contributes to SEBI-registered AIFs that may go up to a maximum of 35 per cent of the corpus of the AIF concerned.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: