India’s enterprise capital business has been urged to submit a white paper with policy recommendations to regulators that could help in addressing issues raised by stakeholders within the startup landscape. Indian Private Equity and Venture Capital Association (IVCA) is a nodal body designated for Risk capital sector in India.
The development has come right after a roundtable organised by Startup India, an initiative organised by Ministry of Commerce and chaired by Suresh Prabhu that witnessed participation of representatives from Department of Industrial Policy and Promotion (DIPP), market controller Securities and Exchange Board of India (SEBI) , Small Industries Development Bank of India(SIDBI) and Department of Revenue and Economic Affairs.
SIDBI Chairman, Mohammed Mustafa stated,
The concept has been initiated to be able to confront different regulatory points put forward by enterprise capital corporations that are often taken up and require the involvement of a concerned authority for additional decision.
A lot of other key issues were raised by the managers during the brainstorming session which included investment in AIF’s by entities not covered so far, taxation of alternative investment funds, the listing of AIF’s to enhance liquidity for investors, favoring domestic pool for startups.
“The idea of bringing stakeholders together seems very beneficial. The government wants to send across a message that it is keen on a mission mode to drive employment.”, said Rahul Khanna, MD at Trifecta Capital.
A much evident issue of allocation of possible allocations of capital by ministries to AIF’s was also raised by the VC industry. Presently, the various pool of capital available from government’s end has multiple end-user requirements, this poses a great difficulty for money managers often leading to capital drawdown.
Electronic Development Fund, Technology Development Board, and SIDBI have helped investments funds such as Blume Ventures and Trifecta Capital as their beneficiaries in the past, hence, it is not the first time when an industry body has underwent regulatory inspection.
Moreover, NITI Aayog had organized an event called Champions of Change with the same motive to boost startup and investor ecosystem in the country.