Inspired by the famous Dorm Room Fund of the US, which invests in start-ups managed by students, domestic accelerator venture capital firm 9Unicorns has launched its own version of a student fund to help budding entrepreneurs from premier technical and management schools.
The fund is looking at investing between $50,000 and $75,000 each in 20 start-ups every year, which would be identified from the IITs and IIMs to begin with before enhancing the scope to include other leading institutions as well.
This assumes significance as the recent past has been a spurt in the number of new start-ups getting registered in India - the third-largest economy in terms of number of start-ups - with a record number of such ventures achieving unicorn status as well.
A start-up with a valuation of at least $1 billion is called a unicorn.
Meanwhile, the student fund concept may be new to India, but it is quite popular in many other economies, including US, China and Switzerland. In India, there are only a couple of such funds that are dedicated for students aspiring to start their own venture while in college.
In the case of 9Unicorns, the VC fund will appoint "scouts" across the premier institutions to help identify the potential ideas that can be funded through the student fund.
"Colleges are the hotbed of innovations. The idea is to sensitise the students about the start-up ecosystem and enable them to be a part of it right from the beginning," said Apoorva Ranjan Sharma, Co-founder & President, 9Unicorns.
"Several institutes these days have started entrepreneurship-focused courses, proving that India is fast emerging as the land of start-ups. We are targeting concept-stage start-ups, which we will mentor and nurture further," he added.
While the fund will initially tap the IITs and the IIMs, it will also look at other institutions in Tier 2 cities as well.
"The students now have options whether to sit for campus placement or dropout and start their ventures," said Sharma while highlighting the fact that the idea emerged from his personal experience of funding Oyo founder Ritesh Agarwal when he was just a college dropout.
Interestingly, many of the well-known entrepreneurs in India and overseas have been college dropouts, with the most notable example being that of Facebook's Mark Zuckerberg who dropped out of Harvard to pursue his idea of creating a social media platform.
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