Angel & VC Funds
Planting an orchard, not buying fruit. Most saplings won’t make it. The few that do bear fruit for a generation — and one great tree can pay for the whole orchard.
What it actually is
Category I AIFs (VC and angel funds) investing in early-stage companies. Returns follow a power law: many investments fail, most muddle through, and one or two winners are expected to return the whole fund. Patient, decade-long capital at the frontier of risk.
The job it does
- Participation in India’s startup ecosystem with professional selection
- Truly uncorrelated, decade-horizon compounding
- For business families: a structured window into new-economy models
Why people use it
- Diversified exposure vs writing individual angel cheques
- Professional diligence, board access, follow-on discipline
- Vintage-year diversification possible across commitments
What can go wrong
- Longest lock-in of any structure — 8–12 years with capital calls
- J-curve: early years show losses before winners mature
- Manager dispersion is the widest of any category
Does Angel & VC Funds belong in your architecture?
Seven questions narrow thirteen structures to a shortlist.
Content on this site is for education only and is not investment advice or an offer to sell any product. Past performance does not guarantee future results. Please consult your Chartered Accountant and read all scheme documents before investing.