Alternative Investment Funds (AIFs) are unique financial assets that differ from traditional investments like stocks and bonds. They are privately pooled vehicles targeting sophisticated investors and are categorized into three types: Category I, II, and III. Category I AIFs focus on socially or economically beneficial investments, such as early-stage ventures, infrastructure, and social enterprises. This category includes Venture Capital Funds, Angel Funds, Infrastructure Funds, and Social Venture Funds, all of which encourage substantial investments. Investors, including NRIs and foreigners, must invest a minimum of ₹1 crore, with a three-year lock-in period and a cap of 1,000 investors per scheme.