New Delhi, Mar 23 (KNN) The proposals with regard to the Fund of Funds of Start-ups (FFS) which was established in June, last year with a corpus of Rs. 1,000 crores, has been approved by the Government.

The Union Cabinet in its meeting held on June 22, 2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore, with contribution spread over the 14th & 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 Alternative Investment Funds (AIFs) for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.

The Cabinet on Wednesday approved the proposal for Alternate Investment Funds (AIFs) supported by FFS to invest at least twice the amount of contribution received from FFS in Start-ups qualifying as per the Gazette Notification G.S.R.180 (E) dt. 17/02/2016. Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.

It was also decided that operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. would be met out of the FFS to the extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year; i.e. April 1 and October 1.

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