SEBI Proposes Angel Fund Investment Reforms to Boost Startup Sector

SEBI has proposed increasing the maximum investment limit by angel funds in startups to Rs 25 crore while reducing the minimum to Rs 10 lakh. The proposal seeks to streamline fundraising processes, strengthen governance, and expand investor eligibility to include accredited investors, focusing on risk management and operational flexibility.

The Securities and Exchange Board of India (SEBI) has put forward a proposal aimed at transforming the investment landscape for startups. The markets regulator suggests increasing the maximum investment capability for angel funds from the current Rs 10 crore to Rs 25 crore.

This move, part of a broader effort to revitalize the new-age technology sector, also seeks to lower the minimum investment requirement from Rs 25 lakh to Rs 10 lakh. Only accredited investors will be permitted to participate in angel funding, ensuring that participants possess the requisite risk appetite.

The initiative is designed to bolster investor protections, improve disclosure requirements, and provide greater operational flexibility for angel funds. SEBI plans to receive public comments on these proposals until November 28.

(With inputs from agencies.)