Thursday, 24 November 2016

Sebi relaxes Angel Funds investment rules for start-ups -The Total Investment & Insurance Solutions

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24 November 2016

To further develop the alternative investment industry and the start-up ecosystem in India, securities market regulator Sebi on Wednesday enhanced the number of 'Angel Funds' in one scheme from 49 to 200. The Total Investment & Insurance Solutions

The regulator announced the changes that are expected to give a boost to the start-up industry after its board met here. The Total Investment & Insurance Solutions

According to the regulator, the upper limit for the number of angel investors in a scheme has been increased by amending -- 'Alternative Investment Funds Regulations, 2012 regarding Angel Funds'.

"Accordingly, Angel Funds will be allowed to invest in start-ups incorporated within five years, which was earlier three years," the regulator said in a statement. The Total Investment & Insurance Solutions

The regulator pointed out that the requirement of minimum investment amount by an Angel Fund in any venture capital undertaking has been reduced from Rs 50 lakh to Rs 25 lakh. The Total Investment & Insurance Solutions

"The lock-in requirements of investment made by Angel Funds in the venture capital undertaking is reduced from three years to one year," the statement said. The Total Investment & Insurance Solutions

To mitigate investment risk, Sebi allowed Angel Funds to invest in overseas venture capital undertakings by up to 25 per cent of their investible corpus in line with other AIFs (alternative investment funds).

On its part, India Inc. welcomed the relaxations proposed by Sebi board.


"While this is a positive news for Angel investors which will augment and strengthen their presence, it will also open multiple avenues for entrepreneurs who intend to seamless exercise their ideas and skills into the business arena," said Gopal Srinivasan, Chairman, Indian Private Equity and Venture Capital Association (IVCA). The Total Investment & Insurance Solutions

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