CSEET · Economic and Business Environment · Entrepreneurship Scenario
The Fund of Funds for Startups (FFS) scheme, managed through SIDBI, supports start-ups mainly by which route?
The Fund of Funds for Startups, operated through SIDBI, contributes capital to SEBI-registered Alternative Investment Funds, and those funds then invest in start-ups. It is an indirect route that mobilises venture capital rather than lending directly to founders or paying their expenses.
- AContributing capital to SEBI-registered Alternative Investment Funds, which then invest in start-upsCorrect
- BGiving interest-free loans directly to every start-up founder
- CBuying shares of start-ups directly from the stock exchanges
- DPaying the salaries of employees of start-ups
Explanation
The FFS does not invest directly in start-ups. SIDBI commits capital to SEBI-registered AIFs (venture funds), and these funds in turn invest in start-ups. Direct loans, stock exchange purchases and salary payment are not features of the scheme.
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