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Starting July 2025, the rules governing Angel Funds in India are undergoing a major overhaul.
These fresh guidelines from SEBI aim to bring greater structure, credibility, and transparency into India’s early-stage investment ecosystem. One of the biggest takeaways? Only SEBI-accredited investors can participate going forward.
Here’s what this regulatory shift means for investors, fund managers, and startups.
π§ What’s Changing in Angel Fund Norms?
π‘οΈ 1. Only Accredited Investors Can Invest
SEBI will now only allow formally Accredited Investors to participate in angel funds. This will:
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Elevate the quality of investors
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Filter out non-serious players
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Strengthen overall trust in the system
π 2. Lower Investment Threshold
The minimum investment size is being slashed from βΉ25 lakh to βΉ10 lakh, opening up access to a wider range of eligible investors.
π 3. No Investor Cap per Scheme
The existing 200-investor ceiling per angel fund scheme will no longer apply.
This allows:
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More investor participation in promising deals
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Greater flexibility in fundraising
π 4. Follow-on Investments Now Allowed
Angel Funds can continue backing a startup even if it loses its DPIIT startup recognition, enabling longer-term support beyond early rounds.
βοΈ 5. Transparent Deal Sharing Required
All investment opportunities must now be shared with every investor in a scheme.
This fosters:
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Greater fairness
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Reduced insider bias
π 6. Accredited Investors Treated as QIBs (for Angel Funds)
A big win for investors—accredited individuals will now be treated as Qualified Institutional Buyers (QIBs) when investing through angel funds.
π What This Means for You
Whether you’re:
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A startup founder raising early capital,
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An investor looking to diversify your portfolio, or
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A fund manager running regulated schemes,
these changes are going to reshape the startup investment playbook in India.
π Is Your Strategy Future-Ready?
Ask yourself:
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β Are you already accredited or working toward it?
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β Are your fund documents and operations SEBI-compliant?
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β Is your structure ready for transparent deal allocation?
If you’re unsure, we’re here to guide you.
πΌ How We Can Help
Our team helps you navigate the new Angel Fund rules with services like:
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SEBI Investor Accreditation Support
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Angel Fund registration & setup
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QIB status advisory
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Compliance management and reporting
π Book a FREE consultation today
+91 93113 47006
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