At LetsVenture we have had many investors ask us:- Why do we ask them for consent on every investment through the Angel AIF?- Why does the lead investor not give consent for individual deals if I have a contractual agreement with him?- Why can't LetsVenture blind pool capital?
- If the LLP partners are accredited investors with a INR 2 cr net worth, does the LLP still need to have a INR 10 cr net worth?We always said this was AGAINST the nature of the guidelines issued by SEBI but investors came back saying that we were being rather conservative. Well, true to our ethos - which is to work towards protecting investor interest and ensuring you don’t have any regulatory liabilities after funding - we asked for clarification on this from multiple legal firms. There was a mixed response.Sunitha then wrote to SEBI to ask for clarification. This is the response, in summary:a. The Angel AIF does NOT allow automatic consent even if there is a contractual agreement in place between any two parties. Investing in this manner is a regulatory violationb. LLP investing into startups SHOULD have a networth of INR 10 cr because SEBI sees the LLP and its partners as "distinct persons".We know as an angel you want to invest into companies but do it the RIGHT way, so you don’t put yourself or other participating investors at risk - doing it the right way is important, not the fastest and easiest.Like with any other form of investing, "angel investing" too falls into a financial space that is regulated. I would only say that as an investor you must know your rights and liabilities or ensure you work with partners who understand this well and have your best interests at heart.
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