If any fund manager fails to pay annual fee within stipulated time, it has to pay a penalty of

Tk25,000 for each month of default

Introducing new investment instrument in the financial market, the securities regulator has
allowed startup firms and small business, having no access to the capital markets, to raise funds
through venture capital.
Bangladesh Securities and Exchange Commission (BSEC) yesterday unveiled the guidelines
called the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules,
2015 to govern the venture capital firms. The rules come into force immediately after
publication in the official gazette.
Over the past several years, venture capital firms that are relatively new in the country have been
operating their businesses in absence of such rules.
Under some excerpts from the slew of new norms, venture capital fund could be invested
primarily in non-listed equity and equity-linked securities of start-ups with less than two years
of operational history or green field companies or emerging early-stage undertakings mainly
involved in new products, services, technologies or intellectual property rights based activities or
new business models.
For operational eligibility, a local venture capital firm needs to have paid up capital of at least
Tk50m and will have to apply for registration to the BSEC with an application fee of Tk50,000
only through a bank draft or payment order issued in favour of the commission.
For a fully-owned subsidiary foreign venture capital firm, it needs to have a paid up capital of at
least Tk150m for application for registration, and for a partially-owned subsidiary foreign firm,
the paid up capital will be at least Tk100m.
The applicant firm must have minimum net worth of 75% of its total paid up capital provided
that if the net-worth of a fund manager, at any time, goes down below 75% of its total paid-up
capital, it wants to increase it up to the required level within the next accounting year.
A chief executive officer or a chief investment officer and a compliance officer of the firm each
must have a relevant academic background and at least seven years of relevant professional
experience, and neither the applicant, nor any of its directors will be a loan defaulter.
After successfully receiving registration within fifteen days, the applicant must have to pay
registration fee of Tk1 lakh. The registered fund manager will have to pay an annual fee of
Tk50,000 within one month of the end of each financial year.
If any fund manager fails to pay the annual fee within the stipulated time, it will have to pay a
penalty of Tk25,000 for each month of default.

The fund manager shall be entitled to an annual fund management fee up to 4% of NAV (net
asset value) of the fund for managing an impact fund, up to 3% of NAV of the fund for managing
a venture capital fund and up to 2% of NAV of the fund for managing a private equity fund. The
fund manager may share up to 20% of the net annual profit of a fund.
About criteria on formation of an alternative investment fund, such fund size will be minimum
Tk100m and subscription by the sponsor is not less than 10% of the fund provided that the
sponsor will subscribe at least 20% of its total subscription to the fund before registration of the
fund.
Minimum investment by the fund manager must be at least 2% of the fund size provided that, if
the fund manager also acts as sponsor of a fund, this investment shall be made in addition to its
investment as the sponsor of the fund.
Along with its connected persons, the fund manager must not hold more than 25% of the units of
a fund at any point of time. The sponsor must maintain a continuous investment of not less than
2.5% of the fund size.
This fund will declare, to the unit holders, cash dividends only and will be locked in for a period
of three years from the date of issuance of units.

Lists of venture capital in Bangladesh:

1)
BD Venture Limited
BD Venture Limited started back in 2012 when we did not have
equity funding rules. It started as a limited company under RJSC
and invested out of its own capital. So far the first invested in
three local companies.

2)
Bangladesh Venture Capital
Founded by Sabur Khan of Daffodil Group, Bangladesh Venture

Capital Limited aims to provide early stage growth fund to

startups. However, we could not find any portfolio information of
Bangladesh Venture Capital Limited.
3)
Venture Investment Partners Bangladesh Limited (VIPB)

4)
IPDC of Bangladesh Ltd | Venture Capital
5)

Fenox
Venture Capital is a global venture capital firm, headquartered in Silicon Valley.
We provide seed, venture, and growth-stage funding to emerging technology
companies globally. Fenox Venture Capital invests in Internet, mobile, social,
cloud and emerging technologies areas.

6) SEAF Bangladesh Ventures

7) Asian Tiger Capital Partners