Migrated Venture Capital Fund
Also written Migrated VCF
A fund once registered under the SEBI (Venture Capital Funds) Regulations, 1996 that re-registered under the AIF Regulations as a Category I venture capital fund. It may not launch new schemes.
In plain language
Before 2012, Indian venture capital funds were registered under the SEBI (Venture Capital Funds) Regulations, 1996. The AIF Regulations replaced that regime, but many old funds still had schemes running. They needed a way to move across.
A migrated venture capital fund is one that did. The regulations define it as "a fund that was previously registered as a Venture Capital Fund under the SEBI (Venture Capital Funds) Regulations, 1996 and subsequently registered under the SEBI (AIF) Regulations, 2012 as a sub-category of Venture Capital Fund under Category I AIF".
The move was a one-way door with a closing date. The definition of a venture capital fund itself now expressly "shall include migrated venture capital fund". But a migrated fund comes across only to finish what it started: it is not permitted to launch any new schemes.
How it works
How a fund migrated (sections 2.3.2 and 4.1.1):
- A fund registered under the 1996 VCF Regulations, "desirous of migrating", could seek registration under the AIF Regulations as a migrated venture capital fund.
- Migration needed the approval of two-thirds of its investors by value of their investment.
- The facility was available till July 19, 2025 only.
What a migrated fund can and cannot do.
| Matter | Rule |
|---|---|
| New schemes | Not permitted |
| Extending the tenure of an existing scheme | Permitted up to 2 years, with approval of two-thirds of unit holders by value of their investment in the migrated fund |
| Schemes whose liquidation period had expired but were not wound up, and which migrated | Granted an additional liquidation period till July 19, 2026 |
Where it sits. A migrated VCF is a sub-category of venture capital fund, which is itself a sub-category of Category I AIF. A venture capital fund invests primarily in unlisted securities of start-ups, emerging or early-stage venture capital undertakings mainly involved in new products, new services, technology or intellectual property based activities, or a new business model.
The general transition rule for existing funds. When the AIF Regulations commenced, existing schemes were allowed to complete their agreed tenure, but such funds could not raise fresh money other than commitments already made.
A worked example
Illustrative figures. Sahyadri Venture Fund was registered under the 1996 VCF Regulations in 2009. It has two schemes still running:
| Scheme | Investors' value | Status in early 2025 |
|---|---|---|
| Scheme A | Rs 180 crore | Tenure ends in 2026; two portfolio companies not yet exited |
| Scheme B | Rs 60 crore | Liquidation period expired in 2023; not wound up |
Migration vote. Investors holding Rs 170 crore of the Rs 240 crore by value approve — 70.8%, above the two-thirds (66.7%) needed. The fund applies before July 19, 2025 and is registered as a migrated venture capital fund under Category I.
Extending Scheme A. The manager wants two more years to exit. Unit holders of Scheme A worth Rs 125 crore of Rs 180 crore approve — 69.4%, again above two-thirds. The tenure is extended by 2 years, the maximum.
Scheme B. Having migrated with an expired liquidation period, it gets an additional liquidation period till July 19, 2026 to sell what is left.
A new fund idea. The manager wants to raise a new Rs 300 crore scheme for climate-tech start-ups under the same fund. It cannot — a migrated VCF is not permitted to launch new schemes.
Why NISM asks about it
Chapter 2 (Alternative Investment Funds in India) defines the migrated venture capital fund at 2.3.2, right after the venture capital fund definition at 2.3.1 that includes it; Chapter 4 (Regulatory Framework — Indian Context) repeats the migration condition at 4.1.1. Expect questions on the two-thirds approval, the July 19, 2025 deadline, the bar on new schemes, the 2-year tenure extension and its approval threshold.
Common exam traps
- Two-thirds of investors by value — for migrating and for extending a migrated scheme's tenure. Not 75%, and not by headcount.
- No new schemes. A migrated VCF runs off its existing schemes.
- Tenure extension: up to 2 years.
- It is a sub-category of venture capital fund under Category I AIF — not a separate category and not Category II.
- Two dates, two purposes. July 19, 2025 was the last date to migrate. July 19, 2026 is the end of the additional liquidation period for migrated schemes whose liquidation period had already expired.
- Stale dates — check before relying on them. Both July 19, 2025 and July 19, 2026 have now passed. Learn them as the workbook states them, but confirm current SEBI position before advising anyone on a migrated fund.
Where this is taught
- Series XIX-A · Chapter 2: Alternative Investment Funds in Indiaintroduced here
- Series XIX-C · Chapter 6: Alternative Investment Funds in India and its Suitabilityintroduced here
- Series XIX-E · Chapter 4: Alternative Investment Funds in India and its Suitabilityintroduced here
- Series XIX-D · Chapter 3: Alternative Investment Funds in India and its Suitabilityintroduced here
- Series XIX-A · Chapter 4: Regulatory Framework - Indian Context
- Series XIX-C · Chapter 17: Regulatory Framework
Related terms
- Alternative Investment FundA privately pooled investment vehicle registered with SEBI that raises money from select Indian or foreign investors under a defined investment policy — never from the public at large.
- Angel FundA sub-category of Category I AIF, registered with SEBI specifically as an angel fund, which raises money from angel investors and invests it in start-ups deal by deal rather than through schemes.
- Category I AIFThe AIF category for funds the government or a regulator treats as socially or economically desirable — venture capital, angel, SME, social impact, infrastructure, special situation and CDMDF funds.
- Venture Capital FundA Category I AIF that invests primarily in unlisted securities of start-ups, emerging or early-stage venture capital undertakings, and includes migrated venture capital funds.
- Venture Capital UndertakingA domestic company that is not listed on a recognised stock exchange at the time the investment is made — the defined target that a venture capital fund must put at least 75% of its investable funds into.
- Self-managed FundAn international fund model in which the investment team are employees of the fund itself and draw their salaries and costs from the fund, so the headline management fee is lower than a normally managed fund's.