The Securities and Exchange Board of India (Sebi) has put forward a consultation paper on November 13, proposing significant changes to the regulations governing angel funds.

These adjustments are aimed at the angel fund sector, which falls under Alternative Investment Funds (AIFs) and primarily involves pooling investments from ultra-high-net-worth individuals (UHNIs) to support early-stage startups.

The proposed modifications could have both positive and negative implications for investors in angel funds. The changes are intended to improve the regulatory framework surrounding angel investments, which typically occur before the involvement of private equity and venture capital investors.

Stakeholders will have the opportunity to provide feedback on these proposed modifications during the consultation process.