Which of the following statements regarding the Startup India Fund of Funds (FoF) is/are correct?
1. The fund operates by directly investing equity capital into early-stage startups via DPIIT.
2. The second iteration (FoF 2.0) has shifted focus to specifically prioritize deep tech and tech-driven innovative manufacturing startups.

Question

Accepted Answer

B. 2 only — Statement 1 is incorrect: The Fund of Funds does not invest directly in startups. Instead, it provides capital to SEBI-registered Alternative Investment Funds (AIFs), known as daughter funds, which then invest in startups (managed by SIDBI). Statement 2 is correct: FoF 2.0 deliberately targets high-risk sectors like deep tech and manufacturing.

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