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Silicon Valley-based AngelList launches angel fund in India

AngelList will manage the legal and regulatory aspects of raising capital and investing it, while the byte-sized funds will be able to use its technology platform to manage their investments.

, ET Bureau|
Nov 08, 2019, 08.19 AM IST
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A fund formed by alums of the Indian Institute of Management, Kozhikode is another angel fund that has been hosted on AngelList, which has backed six startups in the past few months.
Silicon Valley-based AngelList, an online platform which startups can use to raise capital and recruit people, has launched its venture and angel fund product in India that will allow individuals to raise small blind pools of capital and deploy them in a span of 6-12 months.

AngelList will manage the legal and regulatory aspects of raising capital and investing it, while the byte-sized funds will be able to use its technology platform to manage their investments.

These angel and venture funds will be structured in such a way that fund managers make 15% of the profits, while AngelList will charge a 5% fee.

The product, which was conceptualised by AngelList in the United States a few years ago, has seen over 50% of all investments on its platform being driven by angel or venture funds.

“People can raise these small blind pools and deploy the capital over the next 6 to 12 months, while still focusing on their day jobs,” said Utsav Somani, Partner at AngelList. “It’s fully managed by technology and it’s the first time an individual can raise funds without the legal, or regulatory hassles.”

First Cheque, an early stage investment fund backed by several successful startup founders, is one of the funds hosted by AngelList’s new offering. The other big area the US firm is focusing on for venture and angel funds in India is alumni associations of premier management and technical colleges.

A fund formed by alums of the Indian Institute of Management, Kozhikode is another angel fund that has been hosted on AngelList, which has backed six startups in the past few months.

“The ability of the platform to handle everything through the lifetime of the fund including set up, legal review for investments, taxes, financial reporting, wire transfers and distributions is very conducive for a group of likeminded people to come together and invest large cheques into start-ups,” said Revant Bhate, Treasurer, IIMK Alumni Association.

Somani says AngelList’s new offering isn’t an alternative to venture funds, but more aligned with allowing individuals to raise between Rs 2 crore to 8 crore and deploy them in early-stage startups. He added that while the AngelList isn’t focused on increasing the amount of capital available for early-stage companies, the byproduct should be just that.

Further, angel and venture funds using AngelList will also be able to co-invest along with the platform’s own fund called The Collective which is backed by investors such as Binny Bansal, Salil Deshpande of Bain Capital Ventures, Matrix Partners’ Avnish Bajaj, Tarun Davda and Vikram Vaidyanathan and several other marquee investors.

“They (fund managers) can use our approvals, our regulatory clearances, our legal back office and our technology,” added Somani. “Given our experience in this space now, we also go offline to interact with fund administration, fund trustees, their bank accounts and everything else.”

Also Read

Silicon Valley’s AngelList at work on India-dedicated fund

AngelList braces for rainy days as startup seed funding falls

AngelList seeks a way out of Indian regulatory maze

AngelList gets advisor for India in angel investor Utsav Somani

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