PSF disburses funds in proportion to the Venture Capitalists’ investment tranche, offering 10-30 percent of the total investment in a funding round as equity-free capital or a grant.
In a significant move to bolster Pakistan’s startup ecosystem, Ignite, through the Pakistan Startup Fund (PSF), has unveiled a simplified process for Venture Capitalists (VCs) to invest in Pakistani startups. This initiative aims to cultivate an environment conducive to innovation and entrepreneurship within the nation.
Interested VCs can now seamlessly register as PSF partners or members via the dedicated portal. Upon registration, PSF undertakes rigorous due diligence procedures and whitelists VCs, ensuring integrity and transparency throughout the investment process.
Once accredited, VCs are eligible to apply to PSF for grants corresponding to their investments in Pakistani startups. The grant approval process entails comprehensive evaluations by both the VC and PSF’s Investment Committee, guaranteeing the viability and maximizing the impact of the investment.
PSF disburses funds in proportion to the Venture Capitalists investment tranche, offering 10-30 percent of the total investment in a funding round as equity-free capital or a grant. This financial backing plays a pivotal role in supporting startups during critical stages of growth.
Crucially, while serving as an investment partner, PSF refrains from claiming equity, royalties, or governance roles in the startups. This approach allays concerns regarding government interference, empowering Venture Capitalists to retain autonomy in their investment decisions.
Moreover, this initiative not only facilitates capital accessibility for startups but also fosters collaboration between the public and private sectors, propelling innovation and economic advancement in Pakistan’s burgeoning startup landscape.
According to Ignite, the Pakistan Startup Fund, backed by the government, aims to bolster the growth of startups in Pakistan by encouraging investments from both global and local VC funds. It serves as a meticulously structured initiative focused on nurturing startup growth and fostering innovation domestically.
At its essence, the Pakistan Startup Fund emerges as a strategic ally in the success of startups. By bridging their financial requirements, the fund facilitates their growth trajectory. This support acts as the final piece of the puzzle in the initial funding round, supplementing VC investments post their due diligence.
The grant from the Pakistan Startup Fund is disbursed exclusively to eligible startups as the ‘last cheque’ in the ongoing funding round. This stipulates that the startup must secure full investment from the VC before receiving the fund’s grant, positioning it as the ultimate financial component in the startup’s journey, providing additional support post-private sector funding.