The government of Tamil Nadu will set up a ₹100 crore ‘Co-creation Fund’, a unique model designed to participate in private sector venture capital (VC) funds.
According to details in the ‘Tamil Nadu Startup and Innovation Policy 2023’ that was released by Chief Minister M.K. Stalin on Wednesday, the fund, to be managed by investors and coordinated by The Tamil Nadu Startup and Innovation Mission (StartupTN), is inspired by the Yozma (meaning ‘initiative’) model, established by the Israeli Government in the 1990s to kick-start innovative industries by investing in new venture capital funds.
The State government will contribute 40% (with a ceiling of ₹10 crore) in regional, rural impact, women and climate action-focused funds and 20% (with a ceiling of ₹5 crore) in other thematic funds promoted by the private sector. As per the regulations, the fund size should be ₹20 crore and above, in case of a new fund. The government will bear 75% and 50% of the fund setup costs, respectively, for the above-mentioned categories. The operations will be managed by the fund promoters.
