Startup India Seed Fund Scheme: 2024 , Apply online ,SISFS Eligibility, Interest Rate

Startup India Seed Fund Scheme: The Department for Promotion of Industry and Internal Trade (DPIIT) inaugurated the “Startup India Seed Fund Scheme (SISFS)” on April 19, 2021, allocating a budget of INR 945 Crore. The primary objective is to extend financial support to startups for activities such as Proof of Concept, prototype development, product trials, market-entry strategies, and commercialization efforts. Startups meeting the eligibility criteria can submit their applications for the scheme through the Startup India portal. The Seed Fund will be allocated to selected startups in collaboration with eligible incubators located across India.

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Startup India Seed Fund Scheme Highlights

Name of yojna	Startup India Seed Fund Scheme
startup	19 April 2021
Budget	INR 945 Crore.
Beneficiary	Entrepreneur
Objective	This support is intended to facilitate the growth of these startups
official website	https://seedfund.startupindia.gov.in/ or https://www.startupindia.gov.in.

Startup India Seed Fund Scheme Objective

The objective of the Startup India Seed Fund Scheme (SISFS) is to offer financial support to startups for activities such as proof of concept, prototype development, product trials, market entry, and commercialization. This support is intended to facilitate the growth of these startups to a stage where they can attract investments from angel investors or venture capitalists, or alternatively, apply for loans from commercial banks or financial institutions.

Benifits of Startup India Seed Fund Scheme

A grant of up to ₹5 crore will be provided to a chosen incubator in milestone-based installments, typically in three or more phases. A management fee component, amounting to 5% of the Seed Fund grant given to the incubator, will be included. For instance, if an incubator is granted ₹1 crore of Seed Fund, the total assistance, including the management fee at 5%, would be ₹1.050 crore.

Note 01: The exact grant amount and installment details for each incubator will be determined by the Experts Advisory Committee (EAC) based on their evaluation.

Note 02: Incubators are required to use the grant exclusively for disbursing funds to eligible startups and are not permitted to allocate the funds for facility creation or any other expenses.

Note 03: The Management Fee allocated to incubators is strictly earmarked for administrative expenditure, selection and due diligence of startups, and monitoring the progress of beneficiary startups. It is not to be utilized for facility creation or any other administrative expenses.

Note 04: Installments will be released to incubators upon submission of proofs of achievement of milestones as decided by the EAC. A proportionate Management Fee will also be released with each installment.

Note 05: The initial installment may constitute up to 40% of the total approved commitment. When the cash-in-hand of the incubator drops below 10% of the total commitment as determined by the EAC, the incubator may request the next installment, which will be released within 30 days of milestone proof submission.

Note 06: Incubators must fully utilize the grant within three years from the date of receiving the first installment of funds.

Note 07: If an Incubator has not utilized at least 50% of the total commitment within the first 2 years, it becomes ineligible for further drawdowns and must return all unutilized funds along with interest.

Note 08: Interest earned on unutilized funds with incubators will be taken into account and adjusted at the time of the next release.

Note 09: Financing of beneficiaries will be conducted with efficiency and care, and selected incubators will be responsible for proper management and disbursement of the Seed Fund.

Note 10: Selected incubators are required to maintain a transparent process for the selection, monitoring, and disbursement mechanism of the fund. Seed Fund will be disbursed to chosen startups after due diligence by the incubator.

Note 11: Incubators are responsible for providing physical infrastructure to selected startups for regular functioning, support for testing and validating ideas, mentoring for prototype or product development, commercialization, and developing capacities in finance, human resources, legal compliances, and other functions. Additionally, they are expected to offer networking opportunities with investors and chances for showcasing at various national and international events. If a selected startup opts not to utilize the physical infrastructure of the incubator, the incubator should offer all other resources and services to the startup.

Note 12: Startups selected by an incubator for assistance under this scheme will not be charged any fees.

Eligibility of Startup India Seed Fund Scheme

To be eligible to apply for the Startup India Seed Fund scheme, an incubator must meet the following criteria:

Legal Entity: The incubator must be a legally recognized entity, falling into one of the following categories:
- a) A society registered under the Societies Registration Act 1860.
- b) A Trust registered under the Indian Trusts Act 1882.
- c) A Private Limited company registered under the Companies Act 1956 or the Companies Act 2013.
- d) A statutory body created through an Act of the legislature.
Operational Duration: The incubator should have been operational for a minimum of two years from the date of application to the scheme.
Capacity: The incubator must possess facilities with the capacity to accommodate at least 25 individuals.
Startup Presence: The incubator must have a minimum of 5 startups actively undergoing incubation on the date of application.
Leadership and Team: The incubator must have a full-time Chief Executive Officer with expertise in business development and entrepreneurship. The CEO should be supported by a capable team responsible for mentoring startups in areas such as testing and validating ideas, as well as in finance, legal, and human resources functions.
Funding Source: The incubator should not be disbursing seed funds to its incubatees using funding from any third-party private entity.
Government Assistance: The incubator must have received assistance from the Central or State Government(s).
Additional Criteria (if not assisted by the Government):
- a) The incubator must be operational for at least three years.
- b) It must have a minimum of 10 separate startups undergoing incubation on the date of application.
- c) The incubator must present audited annual reports for the last two years.

Note: Any additional criteria determined by the Experts Advisory Committee (EAC) will also apply.

Startup India Seed Fund Scheme required documents

Proof of legal entity Incubator
Incorporation Certificate
Proof of assistance from Central/State Government
PAN Card of legal entity
Aadhaar Card of authorized signatory
Board Resolution / Authorisation letter / Poa
Audited Annual Report for last 2 years
Pictures of facilities
Agreement between incubator and startup
CVs of full-time employees Working for the Incubation Center
Self-declaration from authorized signatory of the incubator
Incubator Pitch deck
Any other relevant document

How to Applications process for Startup India Seed Fund Scheme- For Incubators

Step 01: The Call for Applications for incubators will remain open online throughout the year.
Step 02: Incubators from across India are invited to submit their applications for participation in the scheme via the designated platform, https://seedfund.startupindia.gov.in/ or https://www.startupindia.gov.in.
Step 03: Applicants must register on the Startup India portal using their details if they are not already registered.
Step 04: Upon successful registration, applicants can log in and apply for the scheme by selecting the ‘Incubator’ option.
Note 01: All application submissions are conducted online, and there is no requirement for physical document submissions.
Note 02: The scheme does not entail any application fees. Furthermore, selected startups assisted under this scheme will not incur any charges. Neither the incubator nor its staff members are permitted to charge any fees, either in cash or in kind, from applicants or beneficiaries during any phase of selection, disbursement, incubation, or monitoring.
Note 03: An incubator may reapply for funds under the Scheme once it has disbursed or committed its entire previously released grant. Selection of Incubators: Incubators will be chosen based on the following criteria:

Meeting eligibility criteria
Quality of the Incubator team
Availability of infrastructure, including testing labs, etc.
Composition of the Incubator Seed Management Committee (ISMC)
Incubation support provided by the incubator over the last three years, including:
- Number of startups incubated
- Number of startups that progressed from one stage of the business development cycle to the next (graduated)
- Number of startups that received follow-on investments
- Number of startups that achieved a revenue of Rs 1 Cr in the last year
- Two-year survival rate of startups from the date of joining the incubator
Funding support extended to incubatees over the last three years, including:
- Investment agreements signed between incubators and startups
- Number of startups invested in
- Total corpus allocated to incubatees
- Total investments raised by incubatees from external sources
Mentoring provided to incubatees over the last three years, including:
- Number of mentors hired
- Average mentoring hours allocated per startup per month
- Number of IP (patents, copyrights, designs, and trademarks) registered by incubatees
Other support extended to incubatees over the last three years, including:
- Industry/Corporate connections
- Events held for stakeholder engagements
- Participation in other events
Number of startups that the incubator intends to support
Quantum of funds applied for, along with a fund deployment plan with timelines
Any other relevant parameters as decided by the Experts Advisory Committee (EAC).