Fund of Funds for Startups

1) Equity/ equity linked instruments-based funding to startups.

2) Mentorship through experienced AIF managers along with market connects, governance structure.

3) Mobilisation of capital, attracting private investors and mobilising larger capital for startups.

4) Support for innovation-driven enterprises, fostering job creation and economic growth.

5) Strengthens India’s venture capital ecosystem and promotes entrepreneurship.

6) AIFs must invest at least twice SIDBI’s contribution creating a multiplier effect, scheme helped mobilise more than ₹90,000 crore through AIF.

Under FFS support is provided to AIFs. Below are the key eligibility criteria for applying for contribution under FFS

• Funds are registered as either Category I or II Alternative Investment Funds (AIF) with Securities and Exchange Board of India (SEBI) or have applied for the same with SEBI.

• Funds with corpus of less than Rs 1,000 crores.

• Fund`s investment strategy to include investment in startups (Startup as defined as per the Gazette Notification G.S.R.127(E) dt. 19/02/2019 issued by Government of India and as amended from time to time).

• Fund to agree to invest at least twice the amount of contribution sought from FFS into Startups. (For instance, if contribution sought is Rs 100 crore under FFS, Fund should invest at least Rs 200 crore in Startups).

• Fund Manager / team should have prior track record in Fund management or prior investment experience. All the Key members of the Fund should have CIBIL score more than 650 (Key member is defined as Director, Sponsor and Senior Personnel of the Fund).

• All the Key members should be legally eligible to be a Director or in a Managerial position under Indian law (i.e., not barred to be a Director or in a Managerial position under Indian Law).

• Startup should be up to 10 years old from the date of incorporation.

• Must be DPIIT-recognized.

• Should be working on innovation, development, or improvement of products, processes, or services.

• Funding is indirect, through SEBI-registered AIFs supported by SIDBI.

Online

Step 1: Eligibility Screener and Registration

Initial check to confirm applicant meets basic eligibility criteria and registration on the portal.

Step 2: Preliminary Questionnaire

Collection of key details about the fund, strategy, and compliance for initial assessment.

Step 3: Feedback, Go / No-Go

Questionnaire helps in decision making on whether the proposal moves forward based on preliminary review.

Step 4: First Meeting

Introductory discussion to understand fund objectives, structure, and alignment with FFS goals.

Step 5: Detailed Application

Submission of comprehensive documents including fund strategy, team credentials, and compliance.

Step 6: Due Diligence Completed

Detailed evaluation of fund strategy, Fund manager past experience, governance, and operational aspects of the fund.

Step 7: Second Meeting, Feedback & Terms Discussion

Discussion on due diligence findings and key terms & conditions.

Step 8: VCIC Appraisal Memo Submission

Preparation and submission of Venture Capital Investment Committee (VCIC) appraisal summarizing evaluation and recommendations.

Step 9: Present to VCIC Investment Committee

Formal presentation to the VCIC for approval and strategic fit assessment.

Step 10: SIDBI’s Executive Committee

Final review and approval by SIDBI’s Executive Committee for sanctioning investment.

Step 11: Final Feedback, Post IC & EC, Issue of LOI

Communication of decision and issuance of Letter of Intent (LoI) to the selected fund.

Step 12: Agreements Finalisation

Drafting and signing of legal agreements to formalize the investment commitment.

Step 13: Onboarded for the Fund Lifecycle

Completion of onboarding and monitoring throughout the fund’s lifecycle.

1) AIF registration certificate

2) IM Agreement

3) Past Track record (If any)

4) PPM (Private Placement Memorandum)

5) AIF and Fund’s Financials

6) Trust Deed

7) Contributors Details

8) Startup Certificate

9) KYC Documents (Aadhar Card, Pan Card (Individual and Company), Financials, CIBIL Score)

In case of startups, please visit AIF’s website.