1. Angel funding: Here is all you need to know about the new rules

Angel funding: Here is all you need to know about the new rules

Securities and Exchange Board of India (Sebi) has amended Alternative Investment Funds Regulations with respect to angel funds.

By: | Published: November 28, 2016 6:11 AM

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.

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