The Startup India Seed Fund Scheme is now accepting applications. The goal of the scheme is to give seed money to startups with innovative ideas so they can do proof of concept trials.
When a business is just starting out, owners need to be able to get their hands on money quickly.
Startups can only get money from angel investors and venture capital companies after they have shown that their idea works. In the same way, only people with assets can get loans from banks.
The goal of the plan
- The goal of the Startup India Seed Fund Scheme (SISFS) is to help startups get money for proof of concept, prototype development, product testing, entering the market, and going into business.
- This would help these new businesses grow to the point where they could get money from angel investors or venture capitalists or get loans from conventional banks or other financial institutions.
How much seed money can a new business get through the scheme?
The incubator will give the startup’s Seed Fund in the following ways:
Up to Rs. 20 Lakhs in grants for proving Proof of Concept, making prototypes, or testing products. The money will be paid out in stages based on goals. These stages can be about making a prototype, testing a product, getting a product ready to go on the market, and so on.
Up to Rs. 50 Lakhs of funding through convertible debentures, debt, or debt-linked instruments for market entry, commercialization, or scaling up.
According to the rules of the plan, a startup applicant can get seed funding in the form of a grant and debt/convertible debentures each once.
How will the Startup India Seed Fund work?
The Seed Fund will be given to startups that are suitable through incubators that are eligible all over India:
The Nodal Department Experts Advisory Committee is made up of experts from the Department for Promotion of Industry and Internal Trade. Government officials and experts from the industry
Government help/not government help Incubators: Running for at least two to three years
DPIIT-recognised Startups: Founded in less than two years
- “Call for Applications” for incubators and start-ups all year long Sector-agnostic
- No physical nurturing is required
- PAN-India startup scheme
- Startups can apply to up to three centres at the same time.
Criteria for eligibility
- For New Business At the time of application, a startup that was recognised by DPIIT had been set up no more than two years before.The company must have a business idea in order to create a product or service that fits the market, can be sold, and can grow.
- To solve the problem it is trying to solve, the startup should use technology in its main product or service, business plan, distribution model, or method.Startups that come up with new ideas in areas like social effect, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc. would be given priority.
- Startup shouldn’t have gotten more than Rs 10 lakh from any other Central or State Government programme. This doesn’t include prize money from competitions and big challenges, free working space, a monthly allowance for founders, access to labs, or a place to make prototypes.
- According to the Companies Act of 2013 and the SEBI (ICDR) Regulations of 2018, Indian promoters must own at least 51% of the startup when they apply to the incubator for the plan.According to the rules of the plan, a startup applicant can get seed support in the form of a grant and debt/convertible debentures each once.
- For Baby Chicks The nursery must be recognised by the law: A society registered under the Societies Registration Act of 1860, a trust registered under the Indian Trusts Act of 1882, a private limited company registered under the Companies Act of 1956 or the Companies Act of 2013, or a statutory body formed by an Act of the legislature. At the time of the application to the plan, the incubator should have been running for at least two years.
- The nursery must have enough space for at least 25 people.At the time of the application, the incubator must have at least five startups in its care.
- The incubator must have a full-time CEO with experience in business development and entrepreneurship. This person must be backed by a strong team that is in charge of helping startups test and validate their ideas, as well as taking care of their finances, legal, and human resources needs.
- The incubator shouldn’t give out seed money to incubatees using money from a private third party.The Central or State Government must have helped set up the lab.(s)
- If neither the Central Government nor any State Government has helped the incubator: At least three years must pass before the cell can be used.Must have at least 10 different startups incubating in the incubator at the time of the application.
- Must show the last two years’ worth of audited yearly reports Any other factors that the Experts Advisory Committee may decide on (EAC)
Go to https://seedfund.startupindia.gov.in/ for more details.