Venture Capital (VC Funding) helps in driving entrepreneurship and thereby the economy. This presentation explains about the procedures involved in initiating and managing VC Fund in India. Inno Garage is one of the leading consulting companies in India with experience in diversified portfolio. http://www.innogarageconsulting.com/

2. • A diversified consulting company in India with over
10 years of experience in branding, business
consulting, legal consulting

3. • It is either of the following:
– Trust
– Company
– Body Corporate
• Has a dedicated pool of capital
• Raised in the prescribed manner
• Invests in a venture capital undertaking

4. • It means a Domestic Company
– Whose shares are not listed
– Which is engaged in the business of providing services,
production or manufacture

5. • Monies can be raised from any investor, whether
Indian, Foreign or Non-resident
• Contribution made by each investor should be equal
to or more than Rupees Five Lakhs
• The minimum capital at the start-up of the VCF
should be at least Rupees Five Crores

6. • Disclose the investment strategy at the time of
application for registration
• Shall not invest more than 25% corpus of the fund in
one VC undertaking
• Shall not invest in associated companies

7. • Investment in A Venture Capital UndertakingEquity
At least 75% of the investible funds should be
invested in equity or equity linked instruments
Debt
Not more than 25% should be invested in debt or
debt instruments, provided that investment has
already been done in the company by way of equity

8. • Invested In Listed Companies
– Subscriptions to IPOs is restricted to 25% of the investible
funds
– Such IPO investments shall not be liquidated for at least a
year
– Investment in Debt or debt instruments in listed companies
is not allowed

9. • VCF is allowed to be listed on a recognized stock
exchange
• But such listing can be done only after the expiry of 3
years from the date of issue of units of the Venture
Capital Fund

10. • Subscription or purchase of units of a VC fund shall
not be made through public offerings
• It shall be done only through private placements of
its units

11. The applicant will submit:
– Form A along with the Application fees of Rs.1,00,000
and documents as under– Copy of Memorandum and Articles of Association in case the
applicant is set up in the form of a Company (Reg. 4(a) ) or
– Copy of Registered Trust Deed in case the applicant is set up
in the form of a trust (Reg. 4(b) ) or
– Copy of Main objective of constitution in case the applicant
is set up in the form of a body corporate. (Reg 4(c) )
– Copy of Investment Management Agreement (only if
applicable).

12. Other Documents to be submitted–
–
–
–
–
Details of the Sponsor/Settlor
Details of the Trustees/Trustee Company
Details of the Investment Manager/Investment
Advisor/Asset Management Company (AMC)
State whether, the applicant is registered with SEBI in any
capacity or has applied for registration in any other capacity
with SEBI.
– List of all the associates registered with SEBI along with their
Registration No. Please, refer to Reg. 2(aa) of SEBI (Venture
Capital Funds) regulations, 1996 for the definition of the
“associate company”.
– Investment Strategy

13. SEBI will grant the applicant, certification of
registration as a SEBI Registered Venture Capital
Fund:
– When all requirements including the Fit and Proper Person
criteria have been complied with, and,
– On intimation from SEBI for payment of Registration fees of
Rs.5,00,000 as per Second Schedule to Regulations

14. If the application is made by a company :
– The Memorandum of Association mentions the Venture
Capital Fund as its main activity
– It is not allowed to make an offer to the public for
subscription to its shares
– Its director or principal officer or employee is neither
involved in any litigation connected with the securities
market nor has at any time been convicted of any offence
involving moral turpitude or any economic offence

15. If the application is made by a trust:
– The instrument of trust is in the form of a deed and has been
duly registered under the provisions of the Indian
Registration Act, 1908 (16 of 1908)
– The main object of the trust is to carry on the activity of a
venture capital fund
– Its director or principal officer or employee is neither
involved in any litigation connected with the securities
market nor has at any time been convicted of any offence
involving moral turpitude or any economic offence
–
The applicant is a fit and proper person

16. If the application is made by a body corporate
– It is set up or established under the laws of the Central or
State Legislature,
– The applicant is permitted to carry on the activities of a
venture capital fund,
– Its director or principal officer or employee is neither
involved in any litigation connected with the securities
market nor has at any time been convicted of any offence
involving moral turpitude or any economic offence
– The applicant has not been refused a certificate by the Board
or its certificate has not been suspended

17. A scheme of a venture capital fund set up as a trust
shall be wound up:
– When the period of the scheme, if any, mentioned in the
placement memorandum is over;
– If it is the opinion of the trustees or the trustee company, as
the case may be, that the scheme shall be wound up in the
interests of investors in the units;
– If seventy-five per cent of the investors in the scheme pass a
resolution at a meeting of unit holders that the scheme be
wound up; or

18. – A venture capital fund set up as a company shall be wound
up in accordance with the provisions of the Companies Act,
1956 (1 of 1956)
– A venture capital fund set up as a body corporate shall be
wound up in accordance with the provisions of the statute
under which it is constituted
– The trustees or trustee company or the Board of Directors
shall intimate the Board and investors, of the circumstances
leading to the winding up of the Fund or Scheme under subregulation

19. Feel free to give us a call or drop us a mail to take
make your interest into a business
Inno Garage Consulting
No 32, Janapriya Enclave,
LB Nagar, Hyderabad, India – 500068
Phone: 040 64561365, 91 880 188 9344
info@innogaragebranding.com
www.innogarageconsulting.com