In order to give a fillip to startups, SEBI has relaxed investment norms for Angel Funds. The minimum ticket size of Angel Funds has been slashed from Rs.50 lakh to Rs.25 lakh, says a press release issued by SEBI.
Angel Fund is a sub-category of Venture Capital Funds under AIF Category I. As the name suggests, such funds can raise capital from angel investors who invest in startups to support them during initial days.
Earlier in March 2015, SEBI had constituted a committee headed by NR Narayana Murthy, co-founder of Infosys, to suggest measures to boost the startup ecosystem in India and develop the AIF industry.
Based on the recommendations of the committee, SEBI has made amendments in the AIF regulations. Here are some of the key amendments in AIF regulations introduced by SEBI:
- Maximum number of angel investors has been increased from 49 to 200
- Lock in period of three years has been slashed to 1 year
- Angel Funds will now be allowed to invest in startups incorporated within five years. Earlier, it was three years.
- Angel Funds are allowed to invest in overseas venture capital undertakings up to 25% of their investible corpus in line with other AIFs.
