Startup India Seed Fund Scheme (SISFS)

Objective

The 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 to 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. It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.

Eligibility

A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
The startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling.
The startup should be using technology in its core product or service, 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.
Startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme.
Shareholding by Indian promoters in the startup should be at least 51% at the time of application.
A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.

Seed Fund Support

Seed Fund to an eligible startup by the incubator is disbursed as follows:

Up to Rs. 20 Lakhs as a grant for validation of Proof of Concept, or prototype development, or product trials.
Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.
A startup applicant can avail seed support in the form of grant and debt/convertible debentures each once as per the guidelines of the scheme.

Application Process

An online call for applications is hosted on an ongoing basis on the Startup India portal. The application submission is entirely online, and no physical submission of documents is required. Startups have the option to apply to 3 different incubators according to their preference. The funding shall be provided by the incubator according to the startup's preference during application.

Evaluation, Selection of Applications and Closure of Incubation

Eligible applications shall be evaluated based on the following criteria:

Is there a need for this Idea?
Feasibility
Potential Impact
Novelty
Team
Fund Utilization Plan
Additional Parameters
Presentation

Re-application

An applicant can apply to the SISFS again after 3 months of receiving a rejection. This buffer time ensures that the startup has worked on the feedback and is ready for re-consideration.