Sebi relaxes rules for angel funds to boost startup funding

To give a fillip to startup funding, markets regulator Sebi has relaxed its rules for investment by angel funds, including allowing them to invest in up to five-year old entities.

Besides, the lock-in requirement has been reduced from three years to one year for angel funds and their minimum investment threshold has been slashed from Rs 50 lakh to Rs 25 lakh.

Angel funds are allowed to invest in overseas venture capital undertakings up to 25 per cent of their investible corpus in line with other AIFs.

The upper limit for number of angel investors in a scheme will be increased from 49 to 200, Securities and Exchange Board of India (Sebi) said in a notification dated January 4.

The regulator has made amendment to Sebi (Alternative Investment Funds) Regulations, 2012, following which the definition of startup for angel funds investments will be similar to one of DIPP, as given in their startup policy.