Startup Village gets SEBI nod for $10 mn angel fund

Kochi-based Startup Village, the telecom sector focused startup incubator promoted by the central government’s Department of Science and Technology, Technopark Trivandrum and MobME Wireless, has received market regulator SEBI’s approved for its $10 million angel fund, with a greenshoe option to increase the corpus to $20 million. It will invest between $20,000 and $250,000 per company. The approval came through on April 23 via a SEBI notification.

The proposed fund will start investing in telecom and Internet companies once $2 million is raised as part of its first close, said a press release issued by Startup Village today. KPMG and ILFS are advisor and trustee to the fund respectively.  Infosys co-founder and Startup Village chief mentor K Gopalakrishnan, mobile VAS startup MobME, Ravi Pillai, founder of the Rs 16,000-crore Bahrain-based RP Group and other angel investors will be part of the fund.

“The angel fund will invest not only in the most promising startups located in Startup Village but also in similar enterprises across the country. We are looking to broad base the investor profile with a large set of angel investors, many of whom might be first time angel investors in India,” Startup Village chairman Sanjay Vijayakumar (also co-founder and CEO of MobMe) said in the release.

Interestingly, the choice on whether board seats would be given to investors would rest with the entrepreneur. There would also not be any tag-along/drag-along rights imposed (drag-along rights enable a majority shareholder to force a minority shareholder to join in the sale of a company). In the last 12 months, Startup Village has received over 750 startup applications. It is building a 100,000 square feet facility to house the incubator. The overall objective of the incubator is to seed 1,000 startups over the next 10 years, focusing primarily on student startups from college campuses.

For prospective incubatees, some of the incentives to look forward to include a service tax exemption for three years and up to Rs 50 lakh revenues (standard incentive provided to all incubators recognized by the NSTEDB of DST), no-fee initial tax support services from KPMG and the opportunity to raise funds from the $10 million angel fund that is being raised.

Image credit: Startup Village

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