Start-up Seed Fund

Startup India

The Startup India initiative of the Government of India envisages building a robust Start-up ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs.

Startup India Seed Fund Scheme:

Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise.

Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants. It is essential to provide seed funding to startups with an innovative idea to conduct proof of concept trials.

Objectives of SISFS:

The Indian startup ecosystem suffers from capital inadequacy in the seed and ‘Proof of Concept’ development stage.

The capital required at this stage often presents a make or break situation for startups with good business ideas.

Many innovative business ideas fail to take off due to the absence of this critical capital required at an early stage for proof of concept, prototype development, product trials, market entry and commercialization.

Seed Fund offered to such promising cases can have a multiplier effect in validation of business ideas of many startups, leading to employment generation.

Eligibility Criteria:

► A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.

► The startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling.

► The startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted.

► Startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility.

► 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 Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

► A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.

How much seed funding can a startup receive under the scheme?

► Up to Rs. 20 Lakhs as 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 development of prototype, product testing, building a product ready for market launch, etc.

► Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments

► A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.

Documents required for SISFS:

► Certificate of Incorporation

► DIPP Certificate

► PAN, Aadhaar, Photo, Mobile No. & Email id of all Directors

► Presentation / Pitch Deck

► Login Credential of Startup India

► Authorization letter

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