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