Angel Investors in India May Become Extinct: Andy Mukherjee

Angel investing in India has just crossed a modest milestone of $1 billion in commitments, and already the nascent asset class is facing extinction. Blame it on an overdose of regulatory attention.

Until recently, affluent individuals who placed small bets on long shots were targeted with a bizarre “angel tax,” which viewed startups’ fundraising as taxable income. Now that the government has finally scrapped the draconian levy, the Securities and Exchange Board of India has sown fresh seeds of disquiet for people who want to try early-stage allocations via collective investment plans: It wants them to get accredited.

Commitments into angel funds have swelled by 44% over the past year, ...