Angel funds to pay registration fee of Rs 2 lakh: SEBI

Investment in an investee company by an angel fund shall be not less than Rs. 50 lakh and shall be required to be held for 3 years, SEBI said

January 01, 1970 5:30 IST | India Infoline News Service
Market regulator SEBI (Securities and Exchange Board of India) said that angel funds have to pay a registration fee of Rs 2 lakh.

Notifying the addition of angel funds under the alternative investment funds regulations, SEBI said units of angel funds should not be listed on any stock exchanges.

“Angel Funds have been included in the definition of 'Venture Capital Funds' and a separate Chapter has been inserted specific to such funds. Angel funds shall raise funds only from angel investors,” SEBI said in a notification on Monday.
In view of the high risk investments of such funds, certain conditions have been imposed on investors. For instance, individual angel investors shall be required to have early stage investment experience / experience as a serial entrepreneur/ be a senior management professional with 10 years experience, SEBI said.

They shall also be required to have net tangible assets of at least Rs. 2 crore. Corporate angel investors shall be required to have Rs. 10 crore net worth or be a registered AIF/VCF, the regulator further said.

Angel Funds shall have a corpus of at least Rs. 10 crore (as against Rs. 20 crore for other AIFs) and minimum investment by an investor shall be Rs. 25 lakh (may be accepted over a period of maximum 3 years) as against Rs. 1 crore for other AIFs. Further, the continuing interest by sponsor/manager in the Angel Fund shall be not less than 2.5% of the corpus or Rs. 50 lakh, whichever is lesser, the notification added.

For ensuring investments are genuine angel investments, angel funds shall invest only in venture capital undertakings which are not more than 3 years old, have a turnover not exceeding Rs 25 crore, are not promoted, sponsored or related to an Industrial Group whose group turnover is in excess of Rs. 300 crore, and have no family connection with the investors proposing to invest in the company, SEBI said.

Further, investment in an investee company by an angel fund shall be not less than Rs. 50 lakh and more than Rs. 5 crore and shall be required to be held for a period of at least 3 years.

Further, a minimum amount of Rs. 25 lakh can be collected as grants by Social Venture Funds. However, no profits or gains shall accrue to the provider of such grants.

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