Foreign Venture Capital: Firm Commitment

In order to obliterate the disparity in firm commitment requirements for domestic venture capital funds (VCFs) and foreign venture capital investors (FVCI), SEBI has introduced a new requirement whereby FVCIs are to obtain firm commitment from their investors for contribution of at least US$ 1 million at the time of submission of application seeking registration as FVCIs. Domestic VCFs are required to provide a commitment of Rs. 5 crores (Rs. 50 million) “before the start of operations” by the VCF, while there was hitherto no explicit requirement of commitment for FVCIs that had resulted in a significant amount of ambiguity.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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