SEBI Angel Fund Rules: Accredited Investors Only
Why in the news
SEBI changed who may invest in angel funds, which should lift governance but may slow early-stage funding, especially in smaller cities.
Key facts
- Participation limited to accredited / sophisticated investors.
- Minimum corpus: ₹10 crore; capital raised only from angel investors via units.
- Governing law: SEBI (AIF) Regulations, 2012, with 2013 amendment provisions; regulator SEBI.
Revised terms
| Term | Now | Earlier |
|---|---|---|
| Investor cap | 200 | 49 |
| Minimum investment | ₹25 lakh | ₹50 lakh |
| Maximum investment | ₹5 crore | – |
| Lock-in for angel investors | 1 year | 3 years |
Eligible startups
- Incorporated in India, under 5 years old.
- Turnover below ₹25 crore; unlisted.
- No family ties with the investing angel.
About angel funds
- Pooled money from HNIs or corporates to back early-stage startups, earlier than typical venture capital.
- Classified as a sub-class of Venture Capital Funds in Category I AIFs.
- Angels offer capital, mentorship and networks.
Exam angle
- Category: Category I AIF; corpus minimum: ₹10 crore; startup age limit: below 5 years.