Startup India Seed Fund Scheme (SISFS) aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization to enable these startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions. It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
Seed Fund to an eligible startup by the incubator is disbursed as follows:
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, 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. The portal will be opened soon. DPIIT-recognized startups can log in using the credentials used during the startup recognition process to apply for the scheme. The application submission is entirely online, and no physical submission of documents is required. startups have the 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 the Preference 1 incubator. If the Preference 1 incubator rejects and the Preference 2 incubator selects, the funding shall be given by the incubator at Preference 2, and so on.
Eligible applications shall be evaluated on the following criteria:
The Selection Committee shall evaluate applicants based on their submissions and presentations and select startups for Seed Fund within 45 days of receipt of application. Selected startups shall receive seed funding under the respective incubator that selects them as beneficiaries as per their preference shared during application. The incubator shall execute a legal agreement with the selected startups before the release of the first instalment. The startup shall submit a final report and audited utilisation certificate at the end of the project duration.
Selected startups shall furnish details on the above parameter to the incubator in all progress reports
An applicant 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.