The Start Up India Fund

According to data available with the SIDBI, the Startup India fund has allocated Rs 2,265 crore to Venture Capital (VC) funds at the end of March 2019, falling short of its capital allocation target by around Rs 1,000-1,200 crore.

  • Also known as ‘Funds of Funds for Startups’, it had a disbursal target of Rs 3,300-3,500 crore to venture capital (VC) firms at the end of the financial year ending March 2019.
  • It was launched in the year 2016 with the corpus of Rs.10,000 crore, to be built over 14th and 15th Finance Commission cycles. SIDBI manages the fund.
  • The government launched this fund to help startups get funding in early stages. The fund does not directly invest in startups, instead, it allocates money to VC funds, which are required to invest at least twice the amount of contributions received from the government.
  • A venture capital (VC) fund is a sum of money that investors commit for investment in early-stage companies.

Startup India

  • It is a flagship initiative of the Government of India, intended to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
  • Since the launch of the initiative on 16th January, 2016, Startup India has rolled out several programs with the objective of supporting entrepreneurs, and transforming India into a country of job creators instead of job seekers.
  • A startup is an enterprise that is initiated by its founders around an idea or a problem with a potential for significant business opportunity and impact.

SIDBI

Small Industries Development Bank of India (SIDBI), set up on 2nd April 1990, under an Act of Indian Parliament, acts as the principal financial institution for promotion, financing and development of the Micro, Small and Medium Enterprise (MSME) sector as well as for coordination of functions of institutions engaged in similar activities.