Vinay Umarji & Chitra Unnithan, Ahmedabad
Business Standard
Setting the trend for B-schools and engineering institutes, the Centre for Innovation, Incubation and Entrepreneurship (CIIE) of the Indian Institute of Management, Ahmedabad, has formed a company under Section 25 of the Indian Companies Act, 1956. This will enable the firm, a wholly-owned subsidiary called CIIE Initiatives, to buy stakes in the companies that it incubates by investing its time and resources.
Although several IIMs and IITs run similar centres, their current structure is such that they cannot hold equity in companies they incubate. “The only mechanism by which they work is a service model under which they charge for their services but do not share the risk,” explained Rakesh Basant, IIM-A faculty member and chairperson of CIIE.
A Rs 1.50 crore IT fund is being set up with the help of the department of information technology and a Rs 1.25 crore science fund will be financed by the department of science and technology. “We are also planning to set up a renewable energy seed fund,” he added.
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