General Obligations and Responsibilities
A VCF is not permitted to issue any document advertisement inviting offers from public for subscription purchase of any of its units. It may receive money from investment in the VCF through only private placement of its units.
Placement Memorandum Subscription Agreement
The VCF should (i) issue a placement memorandum containing details of the terms conditions or (ii) enter Into contribution subscription agreement with the Investors specifying the terms conditions subject to which money is proposed to be raised. It should me with SEBI for information a copy of the same along with a report of money actually collected from investors. The contents of the placement memorandum subscription agreement by a VCF established as a trust are listed as follows:
(a) Details of the trustees or trust company and the directors or chief executives of the venture capital fund;
(b) (i) Proposed corpus of the fund and the minimum amount to be raised for the fund to be operational, (ii) Minimum amount to be raised for each scheme and the provision of refund of money to investors in the event of non receipt of minimum amount:
(c) Details of entitlements on the units of the VCF for which subscription is being sought;
(d) Tax implications that are likely to apply to investors:
(e) Manager of subscription to the units of the VCF;
(f) The period of maturity, if any, of the fund;
(g) The manner if any, in which the fund is to be wound up:
(h) The manner in which the benefits accruing to investors in the units of the trust are to be distributed:
(i) The details or the fund manager or the asset management company, if any, and of fees to be paid to such manager;
(j) The details about the performance of the fund, if any, by the fund manager;
(k) Investment strategy of the fund; and
(l) Any other information specified by SEBI.