Chaired by Prime Minister Narendra Modi, the Union Cabinet approved a Rs. 10,000 crore corpus toward the Fund of Funds for Startups (FFS) – which was established in June last year. As per the decision taken, the FFS, which supports the Alternative Investment Funds (AIFs), is to invest at least twice the amount contributed by FFS into startups.
It was further decided that the FFS would meet the operating expenses for the Venture Capital Investment Committee (VCIC) to the extent of 0.50 percent of the commitments made to AIFs. This includes due diligence, legal and technical appraisals, and convening meetings.
According to a statement released, the capital will be debited to the fund “at the beginning of each half-year, i.e. April 1 and October 1.”
To boost the Startup India campaign last year, the Union Cabinet had approved to establish the Fund of Funds for Startups with a corpus amounting to Rs. 10,000 crore. The FFS was to contribute to the AIFs toward investment in seed and early stage startups.
The Small Industries Development Bank of India (SIDBI) manages the FFS and contributes to SEBI-registered AIFs that could go up to a maximum of 35% of the corpus of the AIF concerned.