Following Union Finance Minister P. Chidambaram’s announcement in the Union Budget 2013-14, the Securities and Exchange Board of India (SEBI) issued guidelines for angel investor pools to be recognized as Category I AIF (Alternative Investment Funds) Venture Capital Funds.The guidelines stipulate that minimum period of angel investment by an angel fund should be for a period of three years and the ticket size should not less than Rs. 50 lakh and not more than Rs. 5 crore. The investments can be spread across three years. Angel investments can only be done in a company incorporated in India having a turnover of less than Rs. 25 crore. Further, the company should be unlisted and should not be sponsored. It should not belong to an industrial group that has a turnover of more than Rs. 300 crore.
The guidelines also have clarified on individual investors and AIFs. For individual angel investors, the minimum investment is Rs. 25 lakh while for AIFs it is Rs. 1 crore, spread over three years. The angel fund should hold a corpus of Rs. 10 crore and the AIFs should have a corpus of Rs. 20 crore.
The individual investors should have net assets valued at Rs. 2 crore, whereas the corporate investor should hold net assets of Rs. 10 crore. The individual angel should be a serial entrepreneur, a senior management professional for 10 years, or should have early-stage investment experience.
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