While the details on this angel fund is a bit sparse at the time of writing this article, its worth noting that the Government already manages three VC funds under Karnataka Information Technology Venture Capital Fund (KITVEN). These include KITVEN Fund, KITVEN Fund – 2 and KARVEN Fund (Karnataka Venture Capital Fund).
KITVEN Fund (now liquidated) was focused on investments in IT specific companies with an average investment size of Rs 0.5 crore to Rs 1.5 crore. Its portfolio companies included 17 companies including TELiBrahma, RelQ and 24×7 Learning among others. The KITVEN website suggests that it has already liquidated its entire investment and has returned the corpus of Rs 15 crore with substantial profits.
KITVEN Fund – 2 however undertook investments in companies across the Information Technology, Bio-technology, Nano-technology and other knowledge based industries based in Karnataka, with an average investment size of Rs 1 crore to Rs 2.5 crore. The fund has made investments in seven companies until now including VidTeq, Pawaa Software and Sloka Telecom among others.
Incubation Centers: The government has also proposed to setup incubation centers for Information & Communication Technology (ICT) sector in collaboration with engineering colleges in select district headquarters to encourage entrepreneurship and innovation in this sector. Its worth noting that Manipal University already has a technology business incubator, which was established in March 2010 and was funded by the National Science & Technology Entrepreneurship Development Board (NSTEDB).
As of now, there are around 27 technology business incubators in the country located inside academic institutions like National Institute of Design (NID), Indian Institutes of Technology (IIT), National Institutes of Technology (NIT), Indian Institutes of Management (IIM), Engineering colleges and other technical universities in the country. These incubators were set up by NSTEDB which was established by the Indian government in 1982 under the Department of Science & Technology.
Remember that funds provided to Technology Business Incubators (TBI) based within academic institutions and approved by the Ministry of Science and Technology or the Ministry of Micro, Small and Medium Enterprises, qualifies as CSR (Corporate Social Responsibility) expenditure. Therefore, companies can invest up to 2% of its net profits in startups incubated in technology business incubators and account for it as CSR expenditure.
Bio Accelerator: Besides this, the government has also proposed to establish a Bio-accelerator with a focus on the medical technology space, to build domestically developed products that is affordable to low and middle income Indian consumers.
– #Budget2013: Funds For Technology Incubators In Academic Institutions Get CSR Status; Startup Tax
– SEBI Angel Fund Rules Could Help Ease Startup Tax – Capital Mind
– SEBI’s Angel Fund Norms A Good Step But Need Tweaking: K.Ganesh – StartupCentral