The Department for Promotion of Industry and Internal Trade (DPIIT) has released new rules for the Rs 10,000 crore Startup India Fund of Funds 2.0. These rules explain how the money will be used, managed, and checked. The aim is to make sure startup companies in India get proper financial support.
How Fund Works?
The Ministry of Commerce and Industry said the fund will be given to Category I and Category II Alternative Investment Funds registered with SEBI. These funds will then invest in early and growing startups that are officially recognized.
Small Industries Development Bank of India (SIDBI) will manage the process. It will select which funds get money and check how they use it. The government wants to make the process faster and smoother so that startups can get money quickly.
A senior official said, “Startup India Fund of Funds 2.0 will improve domestic venture capital, support innovation, and make India stronger as a global startup hub.”
Who Governs Fund?
SIDBI will check venture funds before giving them money. It will look at their past record, investment plans, and governance standards. This is to avoid delays and problems faced in the first phase of Startup India.
The fund will also encourage Indian investors like insurance companies, pension funds, and family offices to invest more in startups. Till now, late-stage funding in India has mostly come from foreign investors.
The new rules make sure that money goes only to real tech and innovation companies, not to old-style shops and factories. SIDBI has started checking applications from Indian venture capital firms under these rules. The speed of money use will be the main measure of success for this latest government policy.
DPIIT functioning under the Ministry of Commerce and Industry, is the nodal government body responsible for formulating and implementing industrial policies, investment strategies, and promotional frameworks for India's industrial sector and startup ecosystem.
How to Get DPIIT Recognition
Getting DPIIT recognition has become easier for startups. Registration can be done free of cost on the Startup India portal or the National Single Window System, and approval usually comes within a few working days.
To qualify, the company must be a Private Limited, LLP, or Partnership Firm. It should be less than ten years old and must not have a turnover above Rs 100 crore in any financial year. The startup should be a new entity, not formed by splitting or restructuring an old business. Most importantly, its model should show innovation and the ability to create jobs.
Complete process is online: a profile should be created on the Startup India website, and the recognition section provides the application form. Details of the company, registration, and contact information are filled in, along with a short note on how the product or service is innovative and can grow.
The Certificate of Incorporation and supporting documents like a website link, pitch deck, or patent details are uploaded. After self certification and submission, approval is generally granted within a few days.
