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The Tamil Nadu government plans to set up a ₹500-crore venture capital fund with help from industry experts to structure and manage it.
During discussions with stakeholders on the government-sponsored VC fund, concerns were raised on whether the government should run it. The State government will provide money for the fund, which can start with ₹50 crore or ₹100 crore and gradually increase it to ₹500 crore, said Mangat Ram Sharma, Principal Secretary, Department of MSME, Tamil Nadu.
Sourcing fair“We don’t want to manage the fund as we are too conservative and cannot run it. We want it to be managed by professionals,” he said at CII Startupreneurs 2017 – a Conference and Expo that deliberated on opportunities, challenges and policy interventions that are required for start-ups.
Sharma said a global annual sourcing fair on the scale of the Global Investors Meet is being planned to be held in Chennai to provide both domestic and international companies a platform. The department will spend ₹10 crore a year on this, he said.
Call for Start-up PolicyGopal Srinivasan, CMD, TVS Capital Funds Ltd, urged the government to formulate a start-up policy. There are nearly four lakh IT employees in Chennai, and every year the amount of private equity that flows into the city is the highest in South India, he said.
The same talent and attractiveness of Chennai can be leveraged with a good start-up policy, like what Telengana has done, Srinivasan said.
Tamil Nadu has an infrastructure fund created with a pool of money along with global investors to fund infrastructure projects. The infrastructure fund and ideas like fund-of-fund could be part of start-up policy to give seed capital, Srinivasan added.
Arun Jain, Chairman and Managing Director, Intellect Design Arena, said the start-up ecosystem that began three-fours years ago is similar to the 1991 liberalisation. There is no connection between entrepreneurship and VC funding.
In 1991, the STPI policy came out but for the first five years, it was below the surface. However, it paved the way for the industry to become a $100 billion in 2007, he said.
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