SEBI tightens rules for angel funds: Here's what has changed
SEBI just rolled out stricter guidelines for angel funds in 2025.
Now, new funds need at least five accredited investors (up from three), and only accredited folks can join.
Existing funds have until September 8, 2026, to adjust but can't have more than 200 non-accredited investors during this time.
New timelines and paperwork requirements
Angel funds must now declare their first close within 12 months of registering, with at least five accredited investors; if they miss this deadline, they must refile their placement documents with SEBI.
Plus, SEBI has made things easier by scrapping the old rule that required separate paperwork for every single deal.
Fund-level investments and new caps
Investments now happen at the fund level with better record-keeping.
There's a ₹25 crore cap on follow-on investments per company, locked in for a year (or six months if you're selling to outsiders).
Angel funds are also getting reclassified as standalone Category I AIFs—if they manage over ₹100 crore, they'll need annual audits and more detailed disclosures going forward.