Venture Capital Funding in India
Navigate seed to Series B with SEBI AIF norms, DPIIT benefits, and market‑standard term sheets
Quick Stats
About Venture Capital
Venture capital in India is primarily routed through SEBI‑registered Alternative Investment Funds (AIFs) across Categories I, II, and III, with early‑stage deals typically led by Category I/II funds via equity or CCPS, and structured rights on governance and exits. DPIIT recognition and 80‑IAC tax holiday (subject to IMB) strengthen diligence readiness and investor confidence. [14][18][15]
SEBI continues to refine AIF norms—covering registration, disclosures, valuation, borrowing/leverage, and manager qualifications—raising standards for transparency and investor protection across VC workflows. Founders should align data rooms, cap tables, ESOPs, and board processes to these expectations. [14][2]
Term sheets in the current market emphasize liquidation preferences, anti‑dilution protections, information/inspection rights, and reserved matters, reflecting prudent risk management after recent cycles. [7][6]
SEBI AIF Framework
Funds operate under SEBI AIF Regulations, 2012 (amended 2025): categories, disclosures, valuation, and reporting obligations.
Deal Instruments
Common structures include equity, CCPS, and CCD/convertible notes; SAFEs are adapted to Indian law and FEMA pricing when foreign money is involved.
Investor Protections
Market terms include liquidation preference (often participating), anti‑dilution (usually broad‑based weighted average), and reserved matters/board rights.
DPIIT & 80‑IAC
Recognition and profit deduction eligibility improve diligence outcomes, procurement access, and tax efficiency.
Success Stories
"Closed a Cat‑II AIF‑led seed with clear MIS and unit economics; governance cadence accelerated enterprise wins."
ShipKart
Logistics SaaS
Funded: ₹12 Crore
"Participating liquidation preference and milestone tranches aligned risk sharing and execution focus."
BioNova
Med‑Diagnostics
Funded: ₹40 Crore
"Cross‑border co‑investment complied with FEMA pricing; follow‑on secured from the same AIF platform."
EcoGrid
Clean Energy IOT
Funded: ₹85 Crore
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