SME fund to invest only in early stage startups

The 60 billion yuan ($9.4 billion) State fund for small and medium-sized enterprises will stick to market-oriented operations and invest only in early-stage startups, said an official in charge of the process.

Xu Hongcai, assistant minister of finance, told a news conference on Friday that instead of a monolithic fund, the 60 billion yuan will be embodied in "a web of funds" that leverage private and State-owned companies, financial institutions and local governments, with combined capital of 120 billion yuan to 150 billion yuan.

The State Council on Tuesday revealed plans to set up the national SME development fund to encourage entrepreneurship in the country. To attract more private capital, private investors in the fund will be given priority over government-backed ones in receiving dividends, it said.