Startup India Fund of Funds 2.0 MCQ - Practice Questions with Answers

The incorrect statement is the 3-year evaluation interval. The operational guidelines require an independent third-party evaluation every 5 years from the scheme's operationalisation. They also keep combined Central and State fund-of-funds contributions within 50% of one fund's corpus, cap specified operating expenses at 0.50% annually, and permit up to 5% of returns for capacity building.

The segment-wise maximum Government contributions are ₹500 crore for deep-tech funds, ₹100 crore for smaller early-growth funds, ₹200 crore for innovative manufacturing funds, and ₹180 crore for sector- or stage-agnostic funds. These rupee ceilings operate alongside percentage caps of 40%, 30%, 30%, and 25%, respectively.

The Union Cabinet approved Startup India Fund of Funds 2.0 with a total corpus of ₹10,000 crore. Commitments from this corpus are to be spread over the 16th and 17th Finance Commission cycles. The ₹25,548 crore figure belongs to investments catalysed under the earlier fund-of-funds phase, so it cannot be the answer.

Statement 1 is correct because SIDBI starts implementing the scheme and DPIIT may later select one or more domestic implementation agencies. Statement 2 is incorrect: after due diligence, the Venture Capital Investment Committee screens and recommends proposals, but a sub-committee of the implementation agency's board grants the final sanction.

Startup India Fund of Funds 2.0 is an indirect, market-linked financing scheme. The Government contributes to SEBI-registered Category I and Category II Alternative Investment Funds, and those funds invest in DPIIT-recognised startups. Therefore, it neither grants nor lends money directly to startups.