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Setting Up VC Fund
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Unlocking the Path to Venture Capital Success
At Technomist Ventures, we specialize in providing comprehensive services for setting up and launching your very own Venture Capital (VC) fund. With our expertise in technology, economics, and international business, we are equipped to guide you through the intricate process of establishing a successful VC fund that fuels innovation and drives impactful investments.
From defining your investment thesis and fundraising strategy to structuring legal frameworks and implementing efficient operational processes, we are committed to helping you navigate every stage of the VC fund setup journey. Our deep industry knowledge and extensive network enable us to identify and connect you with high-potential startups, fostering mutually beneficial partnerships.
Partner with Technomist Ventures and embark on a transformative venture capital journey that propels your organization to the forefront of global innovation and investment.
Alternative Investment Fund (AIF) Structure
AIFs are structured as privately pooled investment vehicles, usually in the form of a trust or a limited liability partnership (LLP).
AIFs can be established as either Category I, Category II, or Category III funds, depending on their investment strategies, objectives, and risk profiles.
Category I AIFs (Venture Capital Funds)
Category I AIFs are known as Venture Capital Funds (VCFs) and primarily invest in startups or early-stage companies.
VCFs must have a minimum corpus of INR 20 crores ($2.7 million) contributed by investors.
They have a lock-in period of at least three years, during which the fund cannot exit investments.
Fund Manager
A venture capital fund in India is managed by a fund manager, who is responsible for making investment decisions on behalf of the fund.
The fund manager must have relevant experience and meet the eligibility criteria specified by SEBI.
Fundraising and Investors
Venture capital funds raise capital from qualified investors, including high net worth individuals (HNIs), family offices, institutional investors, and foreign investors, subject to regulatory restrictions.
The fund manager typically sets a minimum investment amount for each investor, and the fund has a specific fund size or target corpus.
Investment Strategy
Venture capital funds focus on investing in startups or early-stage companies with high growth potential.
The fund manager performs due diligence on potential investment opportunities, including evaluating the business model, market potential, management team, and financials of the target companies.
Investments are made in the form of equity or equity-linked instruments, and the fund may negotiate a stake in the investee companies.
Portfolio Management
The fund manager actively manages the portfolio of investments, providing strategic guidance, mentoring, and support to the investee companies.
They may have representation on the investee company’s board of directors to monitor progress and influence decision-making.
Exit Strategy
Venture capital funds aim to exit their investments and generate returns within a specific time frame, usually within 5-7 years.
Common exit routes include initial public offerings (IPOs), mergers and acquisitions (M&A), or secondary sales to other investors.
Regulatory Compliance
Venture capital funds in India must comply with SEBI regulations and guidelines, including reporting requirements, periodic disclosures, and investor protection norms.
They are subject to regular inspections and audits by SEBI to ensure compliance with applicable rules and regulations.
Technomist envisions becoming the preferred and reliable ally for venture capitalists, facilitating the creation and management of funds and portfolios. Leveraging our state-of-the-art technology platform and data-driven strategies, we aim to revolutionize the investment landscape and foster a seamless and prosperous journey for our valued clients.