What are Angel Funds?
Angel Funds are a sub-category of SEBI Category I AIFs specifically designed for angel investments in startups. They pool capital from a maximum of 200 investors and invest in early-stage, unlisted companies. Minimum investment is ₹25 Lakhs, making them more accessible than traditional VC funds.
- Lower Entry Point: Minimum investment starts at ₹25 Lakhs
- Early Mover Advantage: First institutional money into promising startups
- Network Benefits: Access to curated dealflow from established angel networks
- Tax Benefits: DPIIT-recognised startups may offer Section 80-IAC benefits
- Diversified Exposure: Spread across multiple startups in one vehicle
How Angel Funds Work
Angel funds operate on a deal-by-deal or blind pool basis:
- Fund manager identifies promising seed/pre-seed startups
- Each deal is presented to investors for commitment
- Capital deployed over 2-3 year investment period
- Portfolio companies supported with mentorship & networks
- Exits targeted in 4–6 years via secondary sales or strategic M&A