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From July 2025, Angel Funds in India will function under an entirely new regulatory framework—and the implications are significant for startups, investors, and fund managers alike.
SEBI’s revamped Angel Fund guidelines are aimed at increasing transparency, boosting investor confidence, and ensuring better governance in early-stage capital flow. One of the biggest highlights? Only Accredited Investors will be permitted to participate.
Let’s break down what’s changing and what it means for you.
π Key Highlights of the New Angel Fund Rules
β 1. Only Accredited Investors Allowed
Gone are the days of loosely-defined eligibility. From July 2025, only SEBI-accredited investors will be permitted to invest in angel funds. This will:
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Tighten the pool of participants
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Improve overall credibility
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Ensure higher-quality investments
π° 2. Lower Entry Barrier
The minimum ticket size has been reduced from βΉ25 Lakhs to βΉ10 Lakhs, making early-stage investing more accessible—especially for younger, well-qualified accredited investors.
π₯ 3. No Cap on Investor Count per Scheme
Previously, Angel Funds had a 200-investor limit per scheme. That restriction is gone. Now:
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More investors can participate in a single deal
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Better capital aggregation is possible
π 4. Follow-on Investments Permitted
Funds can continue investing in a startup even if it loses its DPIIT-recognized startup status, enabling longer and more supportive capital journeys.
βοΈ 5. Fair and Transparent Deal Allocation
All investment opportunities must be transparently offered to all investors in a scheme. This move is designed to reduce bias and create equal access for every investor.
π 6. Accredited Investors = QIBs (for Angel Investments)
SEBI has also extended QIB (Qualified Institutional Buyer) status to accredited investors—only in the context of angel investing—offering them enhanced credibility in capital markets.
π Why This Matters
Whether you’re an:
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Investor looking to participate in high-growth startups,
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Startup founder raising seed capital, or
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Fund manager structuring investment vehicles,
these changes will reshape how capital is raised and allocated in India’s startup ecosystem.
π Are You Ready?
The new regime brings opportunities—but also obligations.
βοΈ Are you SEBI-accredited?
βοΈ Is your fund structure compliant with the new guidelines?
βοΈ Do you have the right setup for deal transparency and investor management?
If you’re unsure, don’t worry. We’re here to help.
πΌ Need Help Navigating the Shift?
We specialize in:
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Accreditation advisory
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SEBI-compliant Angel Fund setup
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Fund structuring & QIB enablement
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Investor onboarding & reporting systems
π Contact us today for a free consultation
+91 93113 47006
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