Chennai: The Tamil Nadu government will set up a start-up fund with a corpus of Rs 250 crore for investments in start-up businesses, as per the new Tamil Nadu Startup and Innovation policy 2018-2023 unveiled by Chief Minister K. Palaniswami on Saturday.
According to the policy, the first tranche of Rs 25 crore will be allotted in the financial year 2019-2020.
Called Tamil Nadu Startup Fund of Funds, it will be managed by a professional financial agency like the Small Industries Development Bank of India.
“It will be registered as an Alternative Investment Fund (AIF) under Securities and Exchange Board of India (SEBI) regulation, 2012. The fund will be invested in other SEBI registered AIFs for investment in Startups and MSMEs established in Tamil Nadu. Government of Tamil Nadu will invest Rs 75 crore in the fund,” according to the policy.
In addition, a Tamil Nadu Startup Seed Grant Fund (TNSSGF) of Rs 50 crore with an allotment of Rs five crore in the first year shall be created in partnership with financial institutions and universities for supporting early stage financing requirements of the start-ups in the form of grants to fill the gap in fund requirement for research and innovations.
The TNSSGF would also provide funding for Idea-to-PoC (Proof of Concept) stages which are pre start-up activities.
According to the new policy, the state and central public sector undertakings (PSU) shall be encouraged to adopt incubators and channelise their corporate social responsibility (CSR) funds.
These incubators shall also serve as an innovation sandbox to solve problems faced by the state/central PSUs which, in turn, shall support start-ups with access to platform, test bed, data, handholding and others. (IANS)
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