Startup India Seed Fund Scheme(SISF) For Startups

The “Guidelines for Startup India Seed Fund Scheme” provide a comprehensive framework to support early-stage startups in India through seed funding. Here is a summary of the main points:

The scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.

Eligibility

  • Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).
  • The startup should not be more than two years old at the time of application.
  • The startup should have a business idea to develop a product or a service with market fit, viable commercialization, and scope of scaling.
  • Shareholding by Indian promoters should be at least 51% at the time of application.

Funding

  • Financial assistance to eligible startups will be provided through incubators.
  • Up to Rs. 20 Lakhs for validation of Proof of Concept, or prototype development, or product trials.
  • Up to Rs. 50 Lakhs for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.

Implementation:

  • The scheme will be implemented by Startup India, a DPIIT initiative.
  • An Expert Advisory Committee (EAC) will be set up by DPIIT to execute and monitor the scheme.
  • The EAC will evaluate and select incubators for allotment of seed funds.
  1. Incubator Selection:
    • Incubators must be legal entities registered in India.
    • They should have been operational for at least two years.
    • They should have facilities to support the startup ecosystem.
    • They should have a minimum of five startups undergoing incubation physically.
  2. Process:
    • Startups will apply to the incubators for seed funding.
    • Incubators will shortlist startups based on eligibility criteria and due diligence.
    • Incubators will forward the recommendations to the EAC.
    • EAC will evaluate and approve seed funding.
  3. Disbursement of Funds:
    • The funds will be released in installments based on milestones achieved.
    • Incubators will monitor the progress of startups and submit periodic reports to DPIIT.
  4. Monitoring and Evaluation:
    • The EAC will periodically review the progress of the incubators and startups.
    • The scheme will be evaluated by a third party to assess the impact.

This scheme is designed to nurture innovation and entrepreneurship by providing crucial early-stage funding, thereby enabling startups to grow and succeed in their respective fields.

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