Check your startup’s eligibility for Startup India Seed Fund Scheme
The Rs 945 crore Startup India Seed Fund Scheme (SISFS) will become operational from April 1 of this year till 2025 and this will be disbursed through selected incubators across India, according to a gazette notification by the government.
Here is how you can see if your startup is eligible for this scheme, which will be implemented by the Department for Promotion of Industry and Internal Trade (DIIT).
Eligibility criteria for startups
A startup, recognised by DPIIT, incorporated not more than two years ago at the time of application.
Startups must have a business idea to develop a product or a service with market fit, viable commercialisation, and scope of scaling.
Startup 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 startups 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.
Startups 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, subsidised working space, etc.
Shareholding by Indian promoters in the startup should be at least 51 percent at the time of application to an incubator for the scheme.
Any startup will not receive seed support more than once each as per provisions of guidelines.
Eligibility criteria for Incubators
The incubator must be a legal entity.
The incubator should be operational for at least two years on the date of application to the scheme.
The incubator must have facilities to seat at least 25 individuals.
The incubator must have at least five startups undergoing incubation physically on the date of application.
The incubator must have a full-time Chief Executive Officer, experienced in business development and entrepreneurship.
The incubator should not be disbursing seed fund to incubatees using funding from any third-party private entity.
The incubator must have been assisted by the central/state government(s).
In case the incubator has not been assisted by Central or State Government: Incubator must be operational for at least three years, Must have at least 10 separate startups undergoing incubation in the incubator physically on the date of application and must present audited annual reports for the last two years.
Assistance to Incubators
Experts Advisory Committee (EAC) constituted by DPIIT shall evaluate incubators for grant assistance. A grant of up to Rs 5 crore would be provided to a selected incubator in milestone-based three (or) more instalments.
Disbursement of Seed Fund to startups by incubators
Up to Rs 20 lakh as grant for validation of proof of concept, or prototype development, or product trials. The grant shall be disbursed in milestone-based instalments.
Up to Rs 50 lakh of investment for market entry, commercialisation, or scaling up through convertible debentures or debt or debt-linked instruments.
Seed fund shall strictly not be used by startups for creation of any facilities and shall be utilised for the purpose it has been granted for.
Selection of Startups
Each of the incubators applying for the Startup India Seed Fund Scheme will constitute a committee called the Incubator Seed Management Committee (ISMC), consisting of experts who can evaluate and select startups for seed support.
The final composition and members of ISMC of each incubator shall be approved by EAC.
The startups shall be selected through an open, transparent and fair process.
The incubator may shortlist applicants based on their evaluation for a presentation before ISMC.
ISMC shall evaluate applicants based on their submissions and presentations and select startups for Seed Fund within 45 days of receipt of application.
All incubators shall provide information about the progress of evaluation of startups real-time to Startup India portal.
Selected startups shall receive seed funding under the respective incubator that selects them as beneficiaries as per their preference shared during application.
All applicants will be able to track the progress of their application on the Startup India portal on a real-time basis.
An applicant, if rejected once, may apply afresh.
The guidelines of the scheme are also available on the website of Startup India.