Startup India Seed Fund Scheme - For Incubators in India

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Startup India Seed Fund Scheme (SISFS)

On April 19, 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) launched the Startup India Seed Fund Scheme (SISFS) with an allocation of INR 945 Crore. This scheme aims to provide vital financial support to startups at various stages of their development journey, including proof of concept, prototype development, product trials, market-entry, and commercialization. Here’s an overview of what the scheme entails:\

Overview table of Startup India Seed Fund Scheme (SISFS)

Aspect	Details
Scheme Name	Startup India Seed Fund Scheme (SISFS)
Launch Date	April 19, 2021
Allocation	INR 945 Crore
Objective	Facilitate growth of startups by providing financial assistance for essential activities such as prototype development and market-entry.
Key Features	– Year-round application – Sector-Agnostic – No mandatory physical incubation – Pan-India reach – Multiple incubator applications
Benefits	– Financial grant up to INR 5 Crore – Additional 5% management fee on the Seed Fund grant for incubators – Disbursement contingent upon meeting predetermined milestones evaluated by Experts Advisory Committee (EAC)
Eligibility Criteria for Incubators	– Legal entity status under specified acts – Operational history of at least two years – Capacity to accommodate minimum of 25 individuals – Active incubation of at least five startups – Competent team with relevant experience
Application Process	Conducted online through Startup India portal
Selection Criteria	– Fulfillment of eligibility criteria – Quality of incubator team – Infrastructure availability – Past performance in incubating startups – Funding and mentoring support extended to startups – Evaluation by Experts Advisory Committee (EAC)
Required Documents	Proof of legal entity, incorporation certificates, audited annual reports, agreements between incubators and startups

Startup India Seed Fund Scheme Launch Date

The Startup India Seed Fund Scheme (SISFS) was launched by Honorable Shri Piyush Goyal on 19th April 2021. This initiative aims to spur entrepreneurship across India by providing financial assistance to startups for various purposes such as proof of concept, prototype development, product trials, market entry, and commercialization. The need for such a fund arises from the essential requirement of capital availability for entrepreneurs during the early stages of enterprise growth.

Objective of the Scheme

The primary goal of the Startup India Seed Fund Scheme is to facilitate the growth of startups by offering financial assistance for essential activities such as prototype development and market-entry. Ultimately, this assistance helps startups advance to a stage where they can attract investments from angel investors, venture capitalists, or secure loans from financial institutions.

Key Features

Year-round Application: The scheme operates with a continuous ‘Call for Applications’ for both Incubators and Startups.
Sector-Agnostic: It caters to startups across various industries without any sector-specific restrictions.
No Mandatory Physical Incubation: Unlike some schemes, physical incubation isn’t mandatory under SISFS.
Pan-India Reach: The scheme is accessible to startups across India.
Multiple Incubator Applications: Startups can simultaneously apply to three different incubators.

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Benefits

Financial Grant: Selected incubators can receive grants of up to INR 5 Crore in milestone-based installments.
Management Fee: Incubators receive an additional 5% management fee on the Seed Fund grant, enhancing the total assistance amount.
Disbursement Process: The disbursement of funds and management fee is contingent upon meeting predetermined milestones evaluated by the Experts Advisory Committee (EAC).

Startup India Seed Fund Scheme Eligibility Criteria

To participate in the Startup India Seed Fund Scheme, incubators must meet certain eligibility requirements, including:

Legal entity status under specified acts.
Operational history of at least two years.
Capacity to accommodate a minimum of 25 individuals.
Active incubation of at least five startups at the time of application.
Presence of a competent team with relevant experience.
Compliance with funding regulations and government assistance.
Additional criteria may be determined by the Experts Advisory Committee (EAC).

Startup India Seed Fund Scheme Application Process

The application process for incubators is conducted online through the Startup India portal. Here’s a step-by-step guide:

Incubators submit applications online via the designated platform.
Applicants register on the Startup India portal if not already registered.
Upon successful registration, applicants can proceed to apply under the scheme by selecting the ‘Incubator’ category.
No physical submission of documents is required, and there are no application fees.

Selection Process

Incubators are selected based on several parameters, including:

Fulfillment of eligibility criteria.
Quality of the incubator team.
Infrastructure availability.
Past performance in incubating startups.
Funding and mentoring support extended to startups.
Other relevant factors evaluated by the Experts Advisory Committee (EAC).

Required Documents for Startup India Seed Fund Scheme

Applicants must submit various documents to support their application, including proof of legal entity, incorporation certificates, audited annual reports, and agreements between incubators and startups.

The Startup India Seed Fund Scheme represents a significant initiative in fostering the growth of startups across India, providing crucial financial support and resources to drive innovation and entrepreneurship. Through its structured approach and transparent process, the scheme aims to catalyze the development of a vibrant startup ecosystem in the country.

Frequently Asked Questions

Q1) What is the objective of the Startup India Seed Fund Scheme (SISFS)?

Ans: The primary objective of SISFS is to provide financial support to startups at various stages of their development journey, including prototype development, market-entry, and commercialization, ultimately helping them attract further investments.

Q2) What are the key features of the SISFS?

Ans: The scheme operates with year-round applications for both incubators and startups, is sector-agnostic, does not mandate physical incubation, has a pan-India reach, and allows startups to apply to three different incubators simultaneously.

Q3) What benefits do selected incubators receive under the SISFS?

Ans: Selected incubators can receive grants of up to INR 5 Crore in milestone-based installments, along with an additional 5% management fee on the Seed Fund grant, contingent upon meeting predetermined milestones evaluated by the Experts Advisory Committee (EAC).

Q4) What are the eligibility criteria for incubators to participate in the SISFS?

Ans: Incubators must meet criteria such as having legal entity status, an operational history of at least two years, capacity to accommodate a minimum of 25 individuals, active incubation of at least five startups, a competent team with relevant experience, compliance with funding regulations, and additional criteria determined by the Experts Advisory Committee (EAC).

Q5) What is the application process for the Startup India Seed Fund Scheme (SISFS)?

Ans: The application process for incubators is conducted online through the Startup India portal, where incubators submit applications, register if not already registered, and apply under the scheme’s ‘Incubator’ category. No physical submission of documents is required, and there are no application fees.

Priti Palit

Priti Palit, an accomplished edtech writer, boasts a wealth of experience in preparing candidates for multiple government exams. With a passion for education and a keen eye for detail, she has contributed significantly to the field of online learning. Priti’s expertise and dedication continue to empower aspiring individuals in their pursuit of success in government examinations.

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