What is an Angel Fund?
Angel funds is a sub-category of venture capital fund under Category I AIFs which was introduced by SEBI in 2013 to boost entrepreneurship for financing small start-ups.
Is SV registered with SEBI as an Angel Fund?
Yes, SV recently got its license from SEBI to launch a Cat-I Angel Fund. More details in press release.
Who is an Angel Investor?
“Angel investor” means any person who proposes to invest in an angel fund and satisfies one of the following conditions, namely,
(a) an individual investor who has net tangible assets of at least two crore rupees excluding value of his principal residence, and who:
(i) has early stage investment experience, or
(ii) has experience as a serial entrepreneur, or
(iii) is a senior management professional with at least ten years of experience;
(b) a body corporate with a net worth of at least ten crore rupees; or
(c) an AIF registered under these regulations or a VCF registered under the SEBI (Venture Capital Funds) Regulations, 1996. Angel funds shall accept, up to a maximum period of 3 years, an investment of not less than `25 lakh from an angel investor.
Who is the sponsor of Angel Fund? What are its roles?
Who is the Investment Manager? What are its roles?
Nucleus AAR Advisors LLP is the Investment Manager of fund.
Roles: The Investment Manager has signed an agreement with the Trustee to oversee the Fund/Investment Scheme, operating within delegated powers and complying with relevant laws. Additionally, the Investment Manager is tasked with managing the Fund/Investment Scheme’s investment program.
Who is the Trustee of the Fund? What are its role?
Mitcon Credentia Trusteeship Services Limited.
What is total life of the fund?
Fund got its license on Aug 28, 2023. Fund’s life is 20 years.
What is the target corpus of the Fund?
What is the minimum capital commitment to be made by the investor?
What happens if minimum capital commitment is not fulfilled by investor?
Who is defaulting contributor?
Investor who fail to transfer the drawdown amount within 15 business days from the drawdown notice is termed as defaulting contributor.
IM can provide a 15 days grace period to the investor.
Defaulting investor can correct the delay by transferring the capital commitment within 15 days from end of grace period with an additional defaulting contribution at 10% p.a interest calculated on daily basis.
However, it must be noted that the Investment Manager has the absolute discretion to waive off the defaulting contribution..
What will be the total number of drawdowns?
During signing of contribution agreement, investor need to transfer upfront drawdown of minimum 20% of the total commitment to the fund. Rest of the drawdowns shall be made as and when investor commits in a scheme of startup.
What are the fees charged by the fund?
Management Fee : 2% of Capital Contribution to be paid with each drawdown.
Setup Fee : Waived off
Annual Operating Fee : Waived off
Carry : Carry shall be decided deal to deal basis. Generally it shall be 10%.
Is there any hurdle rate or catchup applied by fund?
No, fund doesn’t intend to keep any hurdle rate or catchup in the fund.
Who makes decision related to investor's commitment?
Any investment made by the fund shall be done only with prior consent of the investor. SV shall get a confirmation from investor through an electronic mode suitable of tracking such as email/form/whatsapp.
What are the focused sectors for investment?
Fund has have no biasness to any sectors thus Agnostic.
What is the amount fund can invest in each startup?
1. The fund’s investment in any investee company must be between INR 25 lacs and INR 10 Cr.
2. The Fund shall not invest more than 25% of the total investments under all its schemes in one investee company.
What are the investment restrictions on Fund?
The Fund is authorized to invest in private limited companies, partnership firms, or limited liability partnerships in India if they meet the startup criteria outlined by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India. These criteria, defined in a February 19, 2019, notification, or subsequent central government policies, include:
– Being within ten years of incorporation.
– Having an annual turnover below one hundred crore rupees since incorporation.
– Not being associated with industrial groups with turnovers exceeding 300 crore rupees.
– Avoiding family connections with angel investors.
When can the fund exit from a Startup?
What is the face value of units allocated by the fund to investors?
What are the various classes of units in the Fund?
There are a total of 4 classes of units namely Class A, B,C and D.
Class A units are the units which shall be issued to Angel Investors.
Class B units are the units which will be issued to the Investment Manager/Sponsor, and/or its affiliates or group companies or such person as may be decided by the Investment Manager.
Class C units are the units that will be issued to the employees of the Investment Manager and/or to employee welfare trust or such other person as may be decided by the Investment Manager.
Class D units shall be the contributors who are of strategic importance to the fund or the Investment Scheme.
Page No. 8 of PPM
What kind of reports does the investor gets?
SV shall share annual statement of account with all its investors. SV also shares monthly/quarterly reports of its portfolio startups with the investors part of the scheme. Investor update calls are been organised with the founder to share live updates about the working of the startup. SV assigns a Deal Runner who is always available to provide information to investor on demand basis.