Do you have a startup that you know have potential to become successful but it requires funding but you are unsure about where to start when it comes to securing the funds. If your startup has a potential to grow then Startup India SEED Fund Scheme (SISFS) might be the best for you!!
What is Startup India SEED Fund Scheme (SISFS)?
The Startup India Seed Fund (SISF) scheme was launched by the Government of India in January,2021 under the Department for Promotion of Industry and Internal Trade (DPIIT) with the outlay of 945 Crore to provide a financial support to create startups for Proof of Concept, prototype development, product trials, market-entry, and commercialization. Eligible startups can apply for the scheme on the Startup India portal. The Seed Fund will be disbursed to selected startups through eligible incubators across India.
Objective of the Startup India SEED Fund Scheme (SISF) :
The objective of the SISF is provide financial assistance in proof of concept, prototype development and market entry and ready for commercialization. This leads to startups grow to graduate to a level where they will be able to raise investment from angel investors or ventures or capitalists or financial institutions or seek loans from the commercial bank.
Feature of SISFS :
- No mandatory physical incubation
- PAN-india startup programme
- Startup can apply to 3 incubators simultaneously
- Year round “Call for Applications” for incubators and startups
Benefits of SISFS :
- Up to ₹20 Lakhs as a grant for validation of Proof of Concept, prototype development, or product trials. The grant shall be disbursed in milestone-based installments.
- Up to ₹50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.
- Seed funds shall strictly not be used by startups for the creation of any facilities and shall be utilized for the purpose it has been granted for.
Note:
- Incubators can allocate up to 20% of their total grants to startups, with interest on unutilized funds being adjusted during subsequent disbursements.
- Startups receiving funds through debt instruments will pay interest at the prevailing repo rate, with a tenure of up to 5 years and a possible 12-month moratorium. These loans will be unsecured, with no guarantees required.
- Incubators must execute detailed legal agreements with startups before releasing funds, outlining milestones for subsequent disbursements.
- The first instalment for grants must be released within 60 days of application, with progress updates and utilization certificates needed for further disbursements.
- Startups must submit a final report with an audited utilization certificate at project completion. Failed ventures must share learnings and reasons for failure.
- Incubators or their staff cannot charge any fees from applicants or beneficiaries for any process under the scheme.
- DPIIT will establish a grievance cell to address applicant concerns, such as delays in evaluations or fund disbursements.
Eligibility
- A startup, recongnized by DPIIT, and should incorporated not more than 2 years at the time of the application
- A Startup must have innovative business idea capable of commercialization and market fit. It must have scope of scaling too.
- 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.
- A startup should not get more then ₹10 lakhs of monetary support from any other state or central support scheme. This does not include any price money from competition, grand challenges, founder’s monthly allowance,access to labs or access to prototyping facilities.
- Shareholding by Indian promoters in the startup should be at least 51% at the time of application to the incubator for the scheme, as per the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.
Documents Required
- Board resolution/Authorization letter/ PoA
- PAN card
- GST Number
- Aadhaar card
- Bank account details
- Certificate of incorporation/ partnership deed
- Financial statements
- A video about your startup describing your product, service or business model
- Any other relevant documents, as required.
The Startup India SEED Fund scheme (SISFS) can make your startup grow to the next level. But to apply in a government scheme can become difficult without experts that where the consultupindia comes to guide and makes your process smooth. So don’t let scheme challenge stop your business to grow Book a consultation with us and take your startup to new heights.
