The Securities and Exchange Commission of Pakistan (SECP) has introduced the ‘Angel Fund,’ a new category of venture capital fund designed to support early-stage startups in Pakistan. This initiative aims to provide a regulated pathway for angel investing, facilitating the growth of the startup ecosystem in the country.
The Angel Fund operates as a closed-end venture capital vehicle, primarily investing in unlisted securities or financial assets of early-stage startup companies, excluding hedge funds. This move is part of SECP’s efforts to amend the Private Fund Regulations, 2015, to accommodate this new fund category.
To qualify as an eligible investor, individuals must meet specific criteria: they should have earned an income of at least PKR 5 million in the preceding financial year or possess net assets of at least PKR 15 million, excluding the value of their personal residence. Additionally, investors are required to furnish a declaration to the Private Fund Management Company, acknowledging their understanding of the risks associated with investments in private funds.
This development is expected to address the funding gap for startups in Pakistan, offering them access to early-stage capital that is crucial for their growth and development. By formalizing angel investing, SECP aims to attract more investors to the startup sector, thereby fostering innovation and entrepreneurship.
The introduction of the Angel Fund aligns with global trends where structured angel investing plays a pivotal role in nurturing startups. It also reflects SECP’s commitment to enhancing the regulatory framework to support the evolving needs of the startup ecosystem in Pakistan.
For more detailed information, you can refer to the official SECP regulations portal or read the full article on Business Recorder.