STARTUP INDIA SEED FUND SCHEME

INTRODUCTION OF THE SISFS SCHEME

The Hon’ble Prime Minister of India announced the scheme in his Grand Plenary address of Prarambh: Startup India International Summit on 16th January 2021. After approval of EFC and Hon’ble Finance Minister, the scheme has been notified on 21.01.2021.
The Seed Fund will be disbursed to eligible startups through eligible incubators across India.
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.
DPIIT has created Startup India Seed Fund Scheme (SISFS) with an outlay of INR 945 Crore to provide financial assistance to startups for Proof of Concept, prototype development, product trials, market entry, and commercialization. It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.

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. This would 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.
The maximum support can be provided per innovator is up to Rs. 50 lakhs for convertible debenture and 20 lakhs for Grant.

A start-up, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
Start-up must have a business idea to develop a product or a service with market fit, viable commercialization, and scope of scaling.
Start-up should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted.
Preference would be given to start-ups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, textiles, etc.
Start-up 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 start-up should be at least 51% at the time of application to incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

The Government of India have launched Startup India Seed Fund Scheme 2022 in order to build a Startup ecosystem.
This scheme was launched on 16 January 2016 in order to provide opportunities to entrepreneurs to grow their enterprise.
The announcement to launch this scheme was made by our honorable Prime Minister Mr. Narendra Modi
Under this scheme Financial assistance up to Rs, 50 lakh will provide to startups at an early stage through incubators
The government has allocated a budget of Rs 945 crore for this scheme
This fund will be used for proof of concept, prototype development, product trial, market entry, commercialization, etc
The government is going to provide funds to incubators and the incubators will be responsible for providing this fund to startups
3600 entrepreneurs through 300 incubators will get the benefit from this scheme in the next 4 years