Securities and Exchange Board of India (Sebi) has amended Alternative Investment Funds Regulations with respect to angel funds. Here are some of the new norms approved by the markets regulator.
– The upper limit for number of angel investors in a scheme is increased to 200 from 49.
– The definition of start-up for angel funds investments is similar to the definition in Department of Industrial Policy & Promotion’s start-up policy.
– The lock-in period of investment made by angel funds in the venture capital undertaking has been cut to one year from three years earlier.
– Angel funds can invest in start-ups incorporated within five years, which was three years earlier. This will boost investment in start-ups.
– The minimum investment amount by an angel fund in any venture capital undertaking has been reduced to Rs 25 lakh from Rs 50 lakh earlier.
– Angel funds can now invest up to 25% of their investible corpus in overseas venture capital undertakings in line with other AIFs.
– These changes are as per recommen-dations of Alternative Investment Policy Advisory Committee under the chairmanship of NR Narayana Murthy.
– Alternative Investment Funds (AIFs) provide long-term and high-risk capital to a wide variety of ventures at all stages of their evolution.
– AIFs includes risk capital in the form of equity capital for pre-revenue stage companies, early and late stage ventures, growth companies that wish to scale their operations, and even companies facing distress.