SEBI approves Start-up Village Angel Fund

Market regulator SEBI has approved an angel fund of $10 million to address the problem of resource crunch for start-up companies across the country.

The fund that could go up to $20 million with a "green shoe" (over-allotment) option would focus on telecom and internet firms. It would start investing once the initial close of $2 million is achieved.

Consultancy KPMG is the advisor and IlFS is trustee of the fund based at Start-up Village, the country's first telecom incubator, at Kochi.

"The angel fund will be investing not only in the most promising start-ups located in Start-up Village but also in similar enterprises across the country. We are looking to broadbase the investor profile with a large set of angel investors, many of whom might be first time angel investors in India," said the Start-up Village chairman Sanjay Vijayakumar.

Infosys co-founder and Start-up Village chief mentor Kris Gopalakrishnan, MobME, the country's first campus telecom start-up, Ravi Pillai, founder of the Rs.16,000-crore Bahrain-based RP Group and other leading angel investors in India will be part of the fund.

"As the fund is investing at a very early stage, we would be focusing more on the entrepreneur and the team, and less on the idea. A smart entrepreneur is what the fund would back," added Vijayakumar.

The fund would leave the choice with the entrepreneur whether he wants to give a board seat or not.

Welcoming the SEBI's approval, Gopalakrishnan said this will act like a shot in the arm for Start-up Village, which would become the first incubator in India to have its own in-house fund.

"This will help the internet-telecom incubator to get the most conducive ecosystem for product start-ups," said Gopalakrishnan.