This article explains Startup India Seed Fund Scheme (SISFS) that has been launched by the Startup India for promoting innovation and entrepreneurship in the country.
The Startup India Seed Fund Scheme (SISFS) is a government-backed fund that provides early stage funding to Indian startups.
If you’re an Indian startup with an innovative product or service, SISFS may be able to help you get your business off the ground.
To learn more about how to apply for seed funding from Startup India, head over to their website and check out the guidelines for applying. Good luck!
This article also covers information about eligibility criteria, application process etc.
Startup India is the flagship initiative of Government of India which aims to build a strong eco-system for nurturing innovation, creativity and entrepreneurship in the country.
Under this scheme, there is a provision to launch Startup India Seed Scheme (SISFS) for funding of startups.
The Scheme was launched on 16 January 2016 by PM Narendra Modi. It seeks to provide boost to startup ecosystem- through access to information, technology tools, market linkages and funding support.
It also seeks to promote entrepreneurship and provide an opportunity for innovative ideas .
Key Objectives of the Scheme are:
1. To address the seed capital needs of startups with high growth potential, who require seed investment up to INR 2 crores per startup.
2. To establish a robust angel network across selected cities in India , and develop a conducive and transparent environment for investment in startups.
3. To provide access to risk capital and other risk mitigation measures like loan against property (LAP), Credit Enhancement Guarantee Scheme (CEGS), to startup enterprises at an early stage of their life cycle; and;
4. To motivate the investors (angel networks) by providing tax benefits.
5. To promote creation of angel funds which will be driven by the market demand and supply forces, without any government funding involved. For this purpose, a regulation for recognition as an Angel Network has been issued .
Eligibility Criteria for Startup India Seed Fund Scheme are:
A) Startups should have a registered office and a director in the name of the startup.
B) The company should be less than five years old on the date of application.
C) A maximum number of two existing directors (including the mother, father or guardian) can apply for this scheme.
D) At least one woman director must hold at least one-third of the total number of directorships.
E) There should be a minimum turnover of INR 25 lakhs in each fiscal year for at least three out of five years preceding the financial year in which application is made under this scheme.
F) The company should have a net worth not exceeding INR 5 crores at any time during the period of three years preceding the date of application .
G) The amount will be disbursed to the bank account of the applicant company.
H) A maximum number of 2 companies having different set up by same promoters can apply for this scheme.
I) Proprietorship Concerns, LLP or Limited Liability Partnerships are not allowed to apply for this scheme.
J) A company should have at least two years of operation before it can be considered under the Scheme.
K) The startup must work on innovative idea and cannot be in business activities through which is funded initially.
For example, if a startup works in IT Services, Services of IT Enabled Services (ITeS) or Software Product company, then it may fail to qualify under this scheme.
How does the Scheme work?
1) The startup gets registered on Startup India portal.
2) Once registered, the startup shall go through a due diligence process which shall be carried out by the Inter-Ministerial Board (IMB). [Link to IMB]
3) Based on the recommendation of IMB, a certificate on eligibility shall be issued by the department.
4) The startup and angel investor will complete their due diligence and finalize the deal. The Startup India team shall guide startups through the process of fund transfer.
How to apply in Startup India Seed Fund Scheme?
Startups have to register themselves on the portal www.startupindia.gov.in and seek a certificate of eligibility from Department of Industrial Policy and Promotion (DIPP).
The application shall be made online through a prescribed format available on the website. Applicants would be required to upload all their relevant documents.
How do startups get seed funding in India?
Seed Capital refers to the amount of money a new business venture requires for initial development, with startup companies requiring more capital than established ones.
Startup India Seed Fund Scheme is a programme launched by the Government of India with an aim to reduce the difficulties which start-up ventures face at the early stages of their life cycle. It provides an opportunity to start-ups to get funding of up to Rs 10 lakhs .
How do I get funding for my startup?
It is very difficult for startups, especially in technology sector, to raise capital from conventional sources like banks and financial institutions because they tend to require collateral in the form of shares that are not transferable for a number of years.
How does seed capital work?
The startup company is required to submit project reports, business plans and other formalities which will be examined for risk assessment.
The e-wallet facility would be made available to startups within 90 days from the date of notification of this scheme.
Once the application is made, a due diligence report would be prepared by the Inter-Ministerial Board.
Startup India shall ensure that at least 90% of the amount released to a startup company in a fiscal year is directly channelled to its bank account
The Startup India Seed Fund Scheme (SISFS) is a government-backed fund that offers entrepreneurs the opportunity to secure seed funding for their business.
Read also: Top 7 Government Loan Schemes for Small Business in India
If you’re looking to start or grow your business, this could be a great option for you. In order to be eligible for SISFS funding, your startup must meet certain criteria, which we’ve outlined below.
So, how can you get started? You can apply online on the official Startup India website.
We hope this article was helpful and wish you the best of luck as you navigate the process of securing seed funding for your startup!
So, how can you get your hands on some of that sweet Startup India Seed Fund Scheme money?
First, make sure your business is eligible. You’ll need to be a startup incorporated in India with a valid DIN and have less than three years of operations under your belt.
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You should also have a minimum viable product or service ready for launch and market fit. Once you meet those qualifications, it’s time to start filling out the application form.
The process is relatively straightforward but does require some additional documentation like bank statements and proof of concept material.
If everything looks good and you pass the initial review, you could be on your way to securing seed funding from the government to help grow your business. Ready to apply….
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