What is the procedure to start a venture capital & private equity firm or company in India?
You can definitely set up a venture fund in India but its a somewhat complex process. The good news is that hundreds of others have done this before you so you can seek out local advisors to do this.
To put it coarsely: you need to decide (in order) (
- What is your strategy to generate investment returns? What sectors/geography/stage/s
ize of investment?
- Depending on (1) you will need a certain optimum corpus of money to invest – establish a minimum size
- Where is the money coming from (your own money, domestic investors, or foreign investors)?
- How many team members do you need to execute on the strategy in (1) and where will they be based?
- Are you working for management fees or for a share of capital gains (carried interest) or both (most common)?
After you have done the basic analysis, ask yourself why you want to create yet another VC fund in what is a really tough business to operate in.
With all these answers in hand, I would seek out a good law firm to help you structure the various entities you need to make your strategy viable and tax efficient.