Venture Funds are recognized globally as the most suitable form of providing risk capital for the growth of innovative and high technology businesses. Venture capital is an important source of equity for start-up companies. Professionally managed venture capital firms generally are private partnerships or closely-held corporations funded by private and public pension funds, endowment funds, foundations, corporation, wealthy individuals, foreign investors and the venture capitalists themselves.
Traditionally, venture capital in India was an extension of the developmental financial institutions like IDBI, ICICI, SIDBI and State Finance Corporations (SFCs). The first origins of modern Venture Capital in India can be traced to the setting up of a Technology Development Fund (TDF) in the year 1987-88, through the levy of a cess on all technology import payments. TDF was meant to provide financial assistance to innovative and high-risk technological programmes. In 1988, Technical Development and Information Corporation of India (TDICI) (now ICICI Venture) and Gujarat Venture Fund Limited (GVFL) were formed. ICICI bought out UTI’s stake in 1988 and ICICI Venture became subsidiary of ICICI.