Securities and Exchange Board of India (SEBI) has given angel funds nearly seven more months to comply with the mandatory accredited investor requirement, as it extended the deadline to March 31, 2027.
Earlier, angel funds registered with the markets regulator on or before September 10, 2025, were required to implement the accredited investor mandate by September 8, 2026.
The move comes after representations from the Alternative Investment Fund (AIF) industry sought additional time for existing angel funds to transition to the revised regulatory framework, according to the circular issued on Monday.
What changes for angel funds?
The revised framework applies only to angel funds that were registered with on or before September 10, 2025.These funds can continue to offer investment opportunities to up to 200 non-accredited investors during the transition period.
However, from March 31, 2027, the above mentioned category of angel funds will not be permitted to accept contributions from non-accredited investors for investment in an investee company, the markets regulator noted.
Existing investors can continue to hold investments they have already made in the angel fund, as per the terms of the private placement memorandum (PPM) and other fund documents.
Angel Funds registered with SEBI after September 10, 2025 are already required to onboard and offer investment opportunities only to accredited investors.So, this rule does not apply to them.
The circular, issued on Monday, September 8, 2026, comes into force with immediate effect.
What are angel funds?
Angel funds refers to a money pool created by high net-worth individuals or companies for investing in start-ups and early-stage companies, where the risk of losing money can be high.
Minimum investment amount in is ₹25 lakh, though earlier it was ₹50 lakh. The maximum amount of investment cannot exceed ₹5 crore.
Earlier, an angel fund could not invest less than ₹25 lakh or more than ₹10 crore in any investee company. Now, the investment limit has been lowered to ₹10 lakh at the minimum, while the maximum limit has been increased to ₹25 crore per investee company, according to a report by Economic Laws Practice.
The lock-in period of one year for each investment by an angel fund has also been reduced to six months in case the angel fund is exiting by selling its stake to a third party, the report added. However, if the exit is on account of a company buy-back or if the angel fund is selling its stake to the promoters of the investee company, the lock-in period shall be one year.
The accredited-investor framework is aimed at ensuring that investors participating in such opportunities have the required financial sophistication and capacity.
“This circular is issued…to protect the interests of investors in securities and to promote the development of, and to regulate the securities market,” the markets regulator said yesterday.