sc-largeOrganized angel investor networks in India largely work in isolation but that seems to be changing. Some of the country’s top angel networks have come together to form an association dubbed the Angel Association of India (AAI). The outfit was formally instituted on November 21 in a closed door meeting on the sidelines of the recently concluded Asian Business Angel Forum in Mumbai. The leading members of the association include Indian Angel Network (IAN), Mumbai Angels, Chennai Angels, Hyderabad Angels and Harvard Business Angels, among others.

“We’re still early into articulating the operating guidelines for the association. However, this association gives us a country-level platform to address some of the key issues that affect angel investments,” IAN president Padmaja Ruparel toldStartupCentral.

The meeting on Novemebr 21 was part of a series of such meetings that executives from these angel networks have been having since 2012. “Somewhere last year we met with an objective to form an association on the lines of the IVCA (Indian Venture Capital Association). Until now, we didn’t have any representation on any platform. Everybody, each angel network, had to act independently,” said Anil Joshi, who stepped down as president of Mumbai Angels a couple of weeks ago. Joshi was also instrumental in putting together the Asian Business Angel Forum last month.

Apart from Joshi and Ruparel, other angel investor network representatives at the November meeting in Mumbai included Sasha Mirchandani, co-founder of Mumbai Angels and founder of KAE Capital; IAN founding member Saurabh Srivastava; Srini Koppolu, chairman of Hyderabad Angels; and Ramesh Shah, co-founder of HBS Angels India.

The AAI takes its cue in some ways from the Angel Capital Association (ACA), a Kansas-headquartered entity that serves as the nodal trade association of angel groups and private investors in the US. You may recall that we had advocated the case for an ACA-type of outfit in India, soon after Union Budget 2012-2013 had slapped the so-called ‘startup tax’ on startups raising capital from angel investors.

Since it is still early days into the formation of the AAI, neither Joshi not Ruparel were forthcoming on what would be on the association’s immediate agenda.

However, it’s a no-brainer that the ‘startup tax’ — which incidentally comes into force this financial year — is topmost on their minds. Just to recap: in Union Budget 2012-2013, the government had proposed that capital raised by startups from angel investors would be liable to be taxed as income. Subsequently, the government announced an amendment to that proposal whereby it said that startups that raised capital from notified angel investors would not have to pay income tax. Following through with that, this year, the Securities and Exchange Board of India set an investment framework for angel investors that will enable such investments to avail of available tax exemptions.

AAI has a tonne of lobbying to do over the next 6-12 months. Watch this space for more on their future moves.

The original post was published here.

(c) StartupCentral 2013