Startup India Seed Fund Scheme- For Startups

A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application is invited to apply for the scheme.

Seed Funds to an eligible startup by the incubator shall be disbursed as follows: 1. Up to [?]20 Lakhs as a grant for validation of Proof of Concept, or prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to the development of prototypes, product testing, building a product ready for market launch, etc. 2. Up to [?]50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments 3. A startup applicant can avail seed support in the form of grants and debt/convertible debentures each once as per the guidelines of the scheme

No, individual entrepreneurs are not eligible to apply for support under the scheme. Only DPIIT recognized startups can apply for the SISFS.

SISFS is a sector agnostic scheme, which means that startups from any sector can apply for the scheme. However, preference would be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc. This list of sectors is indicative and not exhaustive.

There is no minimum education qualification required for founders to apply for SISFS.

No, there are no exemptions to any of the eligibility criteria. All the criteria must be met on the date of application submission.

An entity shall be considered a "Startup" - 1. If it's incorporated as either Private Limited Company or Registered Partnership Firm or Limited Liability Partnership. A sole proprietorship or a public limited company is not eligible as startup. 2. If it is up to 10 years from the date of its incorporation/ registration. 3. If its turnover for any of the financial years has not exceeded INR 100 crore. 4. If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation. 5. Should not have been formed by splitting up or reconstruction of a business already in existence.

Seed fund shall strictly not be used by startups for creation of any facilities and shall be utilized for the purpose it has been granted for. A grant can be used for validation of Proof of Concept, or prototype development, or product trials. A debt/ convertible debenture can be used for Market entry, Commercialization, or Scaling up.

An online call for applications is hosted on an ongoing basis on the Startup India portal will be opened soon. DPIIT-recognized startups can login using the credentials used during the startup recognition process to apply for the scheme.

The application submission is completely online, and no physical submission of documents is required.

There are no application fees for the scheme. Even after the selection of a startup by an incubator for assistance under this scheme, the startup shall not be charged any fees. The incubator or any of its staff members shall not charge any fee in cash or in kind from applicants or beneficiaries under the scheme for any process of selection, disbursement, incubation, or monitoring.

The scheme aims to maximize the chances of each startup applicant getting supported through seed funds. It also aims to give startups an opportunity to get supported by a relevant incubator that can give the necessary guidance to them. Thus, we give startups an option to apply to 3 different incubators according to their preference. For example, if incubators at Preference 1 and Preference 2 both select a startup, the funding shall be given by Preference 1 incubator. If Preference 1 incubator rejects and Preference 2 incubator selects, the funding shall be given by incubator at Preference 2, and so on.

The incubator preference should be filled at the startup applicants' discretion. Applicants can choose incubators basis their sector, stage, business needs, and strategic goals. Details of the incubators which are part of the scheme will be available on Seed Fund Portal soon.

We maintain confidentiality of all the proposals we receive under the scheme. Your application is only shared with the incubators you apply to for the purpose of evaluation, and with the EAC for the purpose of monitoring.

To apply for the scheme, it is not mandatory to be physically present at the incubator's location. For startups being monitored virtually by the incubator, it is required for both parties to touch base every 30 days. This is to ensure that an incubator will be able to keep a check on the progress of the startup and a startup will be able to take guidance for their business from the incubator.

Yes, you can apply to the SISFS again after 3 months of receiving a rejection. This buffer time is given to ensure that you have worked on the feedback received from incubators and are ready to be considered again.

Application of each startup will be reviewed by an Incubator Seed Management Committee (ISMC) formed by the incubators you apply to. The committee will also be responsible for future assessment of the performance of the startup and disbursement of further tranches. Each ISMC constitutes of the following members: 1. Nominee of Incubator (Chairman) 2. A representative from the State Government's Startup Nodal Team 3. A representative of a Venture Capital Fund or Angel Network 4. A domain expert from Industry 5. A domain expert from academia 6. Two successful Entrepreneurs 7. Any other relevant Stakeholder

After the receipt of the application, each Incubator shall evaluate applicants based on their submissions and presentations and select startups for Seed Fund within 45 days.

Once the startup has submitted its seed fund scheme application, a dashboard can be accessed using their login credential to check the real-time application status.

Applications once filled and submitted are final. The preference order of the incubator cannot be changed at a later stage.

The startup shall bear the cost of any consultants required to guide them through documentation, negotiations with incubator, signing of agreement with incubator, reporting progress after approval of seed fund, etc. Hiring such an external consultant is not mandatory at all, and shall be at the discretion of the startup.

Yes, it is mandatory to sign a legal agreement with the incubator to avail the seed fund you have been granted.

The applicant can discuss the quantum of seed fund and the milestones associated with the tranches to be disbursed with the Incubator Seed Management Committee. The decision of the Committee shall be final.

The selected incubator shall provide physical infrastructure to the selected startups for regular functioning, support for testing and validating ideas, mentoring for prototype or product development or commercialization, and developing capacities in finance, human resources, legal compliances, and other functions. They are also expected to provide networking with investors and opportunities for showcasing in various national and international events. Any other expenses, including living expenses, shall be borne by the startup.

For grants, the first installment to any selected startup shall be released not more than 60 days from receipt of application from the startup. The startup shall submit the interim progress update and utilization certificate to initiate the release of subsequent installment of grant. For debt or convertible debentures, a similar timeline will be aimed but it is understood that due diligence and documentation in these cases can be sometimes time-consuming.

Startups will receive the funds in their company bank accounts.

Each startup will be required to touch base with the incubator team and share updates with them at least once in 15 days via videoconferences or physical meetings. These updates should be shared on the scheme dashboard at least on a monthly basis. In case of milestone-based disbursements, startup shall submit the interim progress update and utilisation certificate to initiate the release of subsequent installment of grant. Startup shall also submit final report and audited utilisation certificate at the end of the project duration.

A startup can choose to not avail the support being offered to them under the scheme. The procedure for the same depends on the stage of the startup in the application process. 1. If the startup has been selected and the seed funding has been approved, they will be required to write a short letter mentioning the reason to pull out of the process. Post the acknowledgment of the letter, they will find a cancel application button on the application tracker tab of their dashboard which will allow them to cancel their application. 2. If the startup has already received any seed fund, it will be required to write a short letter mentioning the reason to pull out of the process. Post acknowledgment of the letter, they will be required to return the fund within 15 days. Post the acknowledgment of refund, they will find a cancel application button on the application tracker tab of their dashboard.

It is understood that every startup cannot be successful. The legal agreement that you sign with the incubator will have provisions related to failure of startups supported under the scheme. For failed ventures, the entrepreneur shall share his/her learnings and the reasons for failure in the report and submit this along with the utilization certificate for the fund amount.