IFCI Venture Capital Funds Limited

Check the gate first

• Ownership: at least 51% of your company must be held by entrepreneurs from the category the fund serves, with management control.
• Track record: the shareholding must have been held for the past 6 months for smaller assistance and 12 months for larger assistance, or a predecessor firm must have met the same test.
• Proof: keep your category documents ready, because they are submitted with the proposal.

Pick the right fund

• Scheduled Castes: apply through the Venture Capital Fund for Scheduled Castes portal.
• Backward Classes: apply through the Backward Classes portal. Women and disabled entrepreneurs are preferred.
• Scheduled Tribes: apply through the Scheduled Tribes portal. It has a dashboard to track your application.
• Products for senior citizens: look at the SAGE Venture Fund and write to asiim@ifciventure.com.

Prepare for a financing, not a grant

• Expect repayment terms. Debentures carry a set tenure, and equity is capped.
• Expect security. Project assets are charged and promoter guarantees are taken.
• Bring a project that creates assets. The funds target manufacturing, services and allied sectors, and start-ups.
• Technology ideas: a certificate from an incubation centre, or a patent or copyright in your name, supports the case.

Where to ask

• Scheduled Castes: funds@ifciventure.com
• Backward Classes: fundsbc@ifciventure.com
• Scheduled Tribes: vcfst@ifciventure.com
• SAGE: asiim@ifciventure.com
• Anything else: business@ifciventure.com

IFCI Venture Capital Funds Limited is the venture capital subsidiary of IFCI Ltd, based at IFCI Tower in Nehru Place, New Delhi. It began in 1975 as the Risk Capital Foundation, a society set up to give soft-term finance to new entrepreneurs, and later became a company. Today it manages venture funds backed by central government ministries. Three of them are built for founders from Scheduled Castes, Backward Classes and Scheduled Tribes.

Who these funds are for

The government funds have a clear gate. Each one is for a company that is owned and controlled by entrepreneurs from the community it serves. The company must have at least 51% shareholding by such entrepreneurs, with management control. For smaller assistance the shareholding must have been held for the past 6 months, and for larger assistance for the past 12 months. A new company can also qualify if it succeeds an older firm, partnership, one-person company or LLP that met the same test and had been running for the required period. You must submit documentary proof of your category when you submit your proposal.

The funds look at manufacturing, services and allied sectors where the money creates assets. Start-ups are eligible. For technology-led ideas, the Scheduled Castes and Scheduled Tribes funds also back innovative projects selected by technology business incubators, and first-time entrepreneurs with support from incubation centres at IITs, NITs, business schools and universities, or with a patent or copyright that has commercial potential. The Backward Classes fund says women and disabled entrepreneurs will be preferred.

The funds

Venture Capital Fund for Scheduled Castes began operating in January 2015, with the Ministry of Social Justice and Empowerment as anchor investor. Venture Capital Fund for Backward Classes followed in October 2019. Venture Capital Fund for Scheduled Tribes, anchored by the Ministry of Tribal Affairs, was formally launched in February 2024. IFCI Venture also manages the SAGE Venture Fund, which gives equity support to start-ups building products, processes and services for senior citizens, in areas such as mental care, social connectivity and productive activity.

What the finance looks like

This is concessional finance, not a grant. The government funds can invest through shares (compulsorily convertible preference shares), compulsorily convertible debentures, optionally convertible debentures and non-convertible debentures. Equity is limited, a company can be given up to 49% equity at most, and in every investment a minimum share must be in debentures. Assistance runs for up to 10 years including a moratorium. Expect security: the assets of the funded project are charged, promoters may need to pledge shares, and personal guarantees with a buyback agreement are taken. The exact terms differ by fund, so read the brochure for your category before you apply.

How to apply

Each fund has its own online application portal, linked from the IFCI Venture home page under Government Funds: one for Scheduled Castes, one for Backward Classes, one for Scheduled Tribes and one for the SAGE fund. Brochures with the guidelines can be downloaded in English and Hindi. Questions go to the fund inboxes: funds@ifciventure.com for Scheduled Castes, fundsbc@ifciventure.com for Backward Classes, vcfst@ifciventure.com for Scheduled Tribes, asiim@ifciventure.com for SAGE, and business@ifciventure.com for everything else.

Other work

IFCI Venture says it has provided finance to about 500 ventures and supported commercialization of over 50 new technologies since it began. It has also managed private equity and venture funds, including the Green India Venture Fund, the India Enterprise Development Fund and the India Automotive Components Manufacturers Private Equity Fund, which are now listed as closed funds. Two new funds, SMEAF-II and GIVF-II, are listed as in the pipeline. It also runs lending operations as a non-banking finance company, with a loan application form on its site. It has a careers page for open roles.

Location

IFCI Venture Capital Funds Limited, IFCI Tower, 16th Floor, 61 Nehru Place, New Delhi - 110 019. The phone number is 011-41732509 and the website is ifciventure.com.