Wednesday, July 15, 2015

SEBI proposes Crowd-funding Norms to help Starups

Crowd-funding is solicitation of funds from multiple investors through an online platform or social networking site for a specific project, business venture or social cause. It can be classified into four categories, including donation crowd-funding, reward crowd-funding, peer-to- peer lending and equity crowd-funding.

Who can raise funds?

  • A company intending to raise capital not exceeding ` 10 crore in a period of 12 months A company which is not promoted, sponsored or related to an industrial group that has a turnover of over ` 25 crore
  • A company which is not promoted, sponsored or related to an industrial group that has a turnover of over ` 25 crore
Who can invest?

  • Accredited Investors
  • Qualified Institutional buyers
  • Companies with a minimum net worth of ` 20 crore
  • HNIs with a minimum net worth of ` 2 crore
  • Retail Investors
  • Who receive advice from an investment consultant or portfolio manager
  • With a minimum annual gross income of ` 10 lakh
  • Who have filed Income Tax return for at least last 3 financial years.

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