Mumbai Angels, the India-based angel investment group, is setting aside US$20 million to create a maiden side car fund which will invest along with group. 

Funds for the division will come from the high net worth individuals and institutional investors who are members. Mumbai Angels initially had five to six members in 2006 but has since grown to a 150 membership base. 

Sidecar funds are common investment strategies for angel networks in developed markets, like the US. These funds allow angel investors to be part of the follow-on investment in portfolio firms. Thus, new investors who missed out on investing in a promising start-up will have a chance to be part of its growth in the process of raising these firms' next round of funding.

Mumbai Angels, founded by Prashant Choksey and Sasha Mirchandani, currently receives 100 to 200 business plans monthly. The group usually invests for a 15 to 20 per cent stake in the new firm.