Union Cabinet approves FFS
Q. Which of the following are the funds setup for startups?- Published on 27 Mar 17a. Alternate Investment Funds
b. Fund of Funds of Start Ups
c. Both a and b
d. None of these
ANSWER: Both a and b
Union Cabinet on 22nd March 2017 approves the proposal to establish the Fund of Funds of Startups or FFS.
Union Cabinet in 2016 approved the proposal to establish a Fund of Funds for Startups with total corpus of INR 10,000 crore.
AIFs supported by FFS should invest at least twice the amount of contribution received from FFS in Startups.
If the account committed for a startup has not been released before a startup ceases, the balance funding can continue thereafter.
Operating expenses out of the FFS to the extent of 0.50 percent of the commitments made to AIFs and outstanding.
Operating expenses include carrying due diligence, legal and technical appraisal, meeting of Venture Capital Investment Committee etc.
Operating expenses will be debited to fund at the beginning of each half year on April and October 1.
Fund of Funds for Startups was approved by Union Government in 2016.
Fund of Funds for Startups is being managed by SIDBI.
FFS contributes to SEBI registered Alternative Investment Funds that may go up to a maximum of 35 percent of the corpus of the AIF concerned.
