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CS Executive · Setting Up of Business, Industrial and Labour Laws · Startups and its Registration

Riya founded a technology startup recognised by DPIIT. She wants to understand which Government of India scheme provides a corpus to SEBI-registered Alternative Investment Funds, which then invest in startups. Which scheme does this describe?

The Fund of Funds for Startups is the scheme. The Government contributes to a corpus that is placed with SEBI-registered Alternative Investment Funds, and those funds invest in startups. The Government does not invest directly in the startup, which differentiates it from loan or pension schemes.

  1. AFund of Funds for Startups (FFS)Correct
  2. BCredit Guarantee Scheme for Startups only
  3. CAtal Pension Yojana
  4. DMudra loan scheme for micro units

Explanation

The Fund of Funds for Startups gives a corpus to SEBI-registered AIFs (daughter funds), which in turn invest in eligible startups. It does not lend directly to the startup. Mudra and Atal Pension Yojana serve different purposes, and the credit guarantee scheme backs loans rather than funding AIFs.

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