Continuing interest requirement ensures manager stake; investor approval and pro rata allocation govern angel fund investments. Regulation 19G requires the manager or sponsor to retain a continuing economic interest in each angel fund investment and prohibits meeting that interest by waiving management fees. The manager must obtain each angel investor's approval before accepting contributions for a specific investee investment, offer each opportunity to all angel investors, disclose a defined allocation methodology in the placement memorandum, accept contributions only from approving investors per that methodology, and allocate investment rights and distributions pro rata to contributions, with required disclosure where the target is an existing investee or related party.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Continuing interest requirement ensures manager stake; investor approval and pro rata allocation govern angel fund investments.
Regulation 19G requires the manager or sponsor to retain a continuing economic interest in each angel fund investment and prohibits meeting that interest by waiving management fees. The manager must obtain each angel investor's approval before accepting contributions for a specific investee investment, offer each opportunity to all angel investors, disclose a defined allocation methodology in the placement memorandum, accept contributions only from approving investors per that methodology, and allocate investment rights and distributions pro rata to contributions, with required disclosure where the target is an existing investee or related party.
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