Section 19F in Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012
19F. Investment by Angel Funds.
(1)Angel funds shall invest [***] [The word 'only' was omitted by the SEBI (Alternative Investment Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.] in venture capital undertakings which:(a)[complies with the criteria regarding the age of the venture capital undertaking/startup issued by the Department of Industrial Policy and Promotion under the Ministry of Commerce and Industry, Government of India vide notification no. G.S.R. 180(E) dated February 17, 2016 or such other policy made in this regard which may be in force;] [Substituted for the words 'have been incorporated during the preceding three years from the date of such investment;' by the SEBI (Alternative Investment Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.](b)have a turnover of less than twenty five crore rupees;(c)are not promoted or sponsored by or related to an industrial group whose group turnover exceeds three hundred crore rupees; andExplanation I: For the purpose of this clause, "industrial group" shall include a group of body corporates with the same promoter(s)/promoter group, a parent company and its subsidiaries, a group of body corporates in which the same person/ group of persons exercise control, and a group of body corporates comprised of associates/subsidiaries/holding companies.Explanation II: For the purpose of this clause, "group turnover" shall mean combined total revenue of the industrial group.(d)are not companies with family connection with any of the angel investors who are investing in the company.(2)Investment by an angel fund in any venture capital undertaking shall not be less than [twenty five] [Substituted for the words 'fifty;' by the SEBI (Alternative Investment Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.] lakh rupees and shall not exceed [ten crores] [Substituted by the SEBI (Alternative Investment Funds)(Amendment) Regulations, 2018, w.e.f. 01-06-2018. Prior to its substitution, it read as 'five crores'.] rupees.(3)Investment by an angel fund in the venture capital undertaking shall be locked-in for aperiod of [one year] [Substituted for the words 'three years;' by the SEBI (Alternative Investment Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.].(4)Angel funds shall not invest in associates.(5)Angel funds shall not invest more than twenty-five per cent of the total investments under all its schemes in one venture capital undertaking:Provided that the compliance to this sub-regulation shall be ensured by the Angel Fund at the end of its tenure.(6)[ An angel fund may also invest in the securities of companies incorporated outside India subject to such conditions or guidelines that may be stipulated or issued by the Reserve Bank of India and the Board from time to time.] [Inserted by the SEBI (Alternative Investment Funds) (Amendment) Regulations, 2016, w.e.f. 04-01-2017.]
