What is the startup India seed fund scheme for startup founders?
What is the startup India seed fund scheme?
Startup India Seed Fund Scheme is a government-backed initiative in India that provides funding to early-stage startups to help them develop and grow their businesses.
The scheme is administered by the Department for Promotion of Industry and Internal Trade (DPIIT) and is aimed at helping startups develop innovative products and technologies, create jobs, and contribute to the growth of the Indian economy.
Under the scheme, the government provides seed funding of up to INR 50 lakhs (around $60,000) to eligible startups to cover the costs of developing prototypes, conducting market research, and other activities related to launching and scaling a new business.
The scheme is open to all sectors and is designed to support startups at the very early stages of their development.
Who and when was it launched?
Startup India Seed Fund Scheme was launched by the Government of India as part of the Startup India initiative, which is aimed at promoting entrepreneurship and supporting the development of startups in the country.
The initiative was launched by the Prime Minister of India, Narendra Modi, in January 2021. The goal of the Startup India initiative is to create a strong ecosystem for startups in India, encourage innovation, and support the growth and development of new businesses in the country.
Why was the scheme launched?
The Startup India initiative, of which the Startup India Seed Fund Scheme is a part, was launched by the Government of India in January 2021 with the goal of promoting entrepreneurship and supporting the development of startups in the country.
The initiative was launched in response to the growing importance of the startup sector in driving economic growth and innovation. Startups have the potential to create jobs, generate wealth, and contribute to the overall growth of the economy, and the Startup India initiative was designed to provide support and resources to help these companies succeed.
The initiative aims to create a supportive ecosystem for startups in India, encourage innovation, and support the growth and development of new businesses in the country.
What kind of startups can get funding?
The Indian government has allocated a budget of Rs 945 crore for the Start-up India Scheme to provide financial assistance up to Rs 50 lakh for start-ups in their early stages through incubators. This scheme will help budding businesses flourish and thrive!
SISFS is open to all startups regardless of sector, however, special consideration will be given to those developing unique solutions in the following areas: social impact, waste management, water management, and other financial inclusion initiatives such as education; likewise agriculture and food processing, biotechnology, and healthcare. Additionally, energy sources like mobility or defense may be considered alongside space exploration, oil & gas production as well as textiles industries. This list is intended simply for guidance purposes – not an exhaustive selection.
What are the benefits of the startup India scheme?
The Startup India Seed Fund Scheme provides funding to eligible startups to help them cover the costs of developing prototypes, conducting market research, and other activities related to launching and scaling a new business. Some of the benefits of the scheme include:
- Financial support: The scheme provides seed funding of up to INR 50 lakhs (about $60,000) to eligible startups to help them get started and grow their businesses.
- Grant funding: The funding provided under the scheme (up to Rs. 20 lakhs) is in the form of a grand and does not require startups to give up equity in their companies.
- Simplified process: The application process for the scheme is designed to be simple and straightforward, with a focus on reducing bureaucracy and encouraging more startups to apply.
- Support for innovation: The scheme is open to all sectors and is aimed at supporting startups that are working on innovative products and technologies.
- Contribution to economic growth: By supporting the growth and development of new businesses, the scheme aims to contribute to the overall growth of the Indian economy.
Who is eligible for the startup India scheme?
To be eligible for the Startup India Seed Fund Scheme, a startup must meet the following criteria:
- A startup that has been recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) and incorporated within the past two years is eligible to apply. To be recognized by the DPIIT, please visit https://www.startupindia.gov.in/content/sih/en/startupgov/startup-recognition-page.html.
- The startup must have a business idea that involves developing a product or service that is viable and has the potential to be scaled.
- The startup should be using technology in its core product or service, business model, distribution model, or methodology to solve the problem being targeted.
- Priority will be given to startups creating innovative solutions in sectors such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc.
- The startup should not have received more than INR 10 lakh (about $13,500) in monetary support from any other Central or State Government scheme, although 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.
- Indian promoters must hold at least 51% of the startup’s shares at the time of application to the incubator for the scheme, according to the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.
- A startup applicant can receive seed support in the form of a grant or debt/convertible debentures, according to the guidelines of the scheme.
What is a DPIIT-recognized startup?
Only DPIIT-recognized startups can apply for the SISFS. A DPIIT-recognized startup is
- incorporated as either a Private Limited Company or Registered Partnership Firm or Limited Liability Partnership. A sole proprietorship or a public limited company is not eligible as a startup.
- operating within 10 years from the date of its incorporation/ registration.
- is a startup where revenue has not exceeded INR 100 crore.
- is working towards innovation, development, or improvement of products or processes, or services, or if it is a business that can easily expand, and has the potential to create jobs or generate wealth.
- a new business and has not been formed by splitting up or reconstructing an existing business.
What is the official website to get more information?
The official website for the Startup India initiative, including the Startup India Seed Fund Scheme, is https://www.seedufund.startupindia.gov.in/. You can find more information about the scheme and how to apply on this website.
You can also get in touch with the Department for Promotion of Industry and Internal Trade (DPIIT) for more information or assistance. The DPIIT is the government agency responsible for administering the Startup India initiative and the Startup India Seed Fund Scheme.