Startup India Seed Fund Scheme 2023 Apply Online, Benefits

Startup India Seed Fund Scheme | seedfund.startupindia.gov.in |

Capital plays an important role in the development of an enterprise. And the availability of capital is not easy for entrepreneurs and this is the reason why many business ideas do not come into existence. Keeping this situation in mind, the Government of India has started the Startup India Seed Fund Scheme (SISFS). So that this situation can be curbed to some extent.

Through this scheme, the Government of India will provide financial assistance to entrepreneurs. Through this article, we will provide complete information related to this scheme what as Startup India Seed Fund Scheme, its benefits, objectives, features, eligibility criteria, required documents, the application process, etc.

If you want to know the details related to this scheme then read this article till the end.

Startup India Seed Fund Scheme

On 16 January 2016, the Startup India Seed Fund scheme (SISFS) was announced by the Honorable Prime Minister Shri Narendra Modi. Through the implementation of this scheme, the Government of India will provide opportunities for entrepreneurs to develop their enterprises as well as create a strong startup ecosystem through this scheme.

Under this scheme, the government is going to provide funds to incubators. The incubator will then be responsible for providing these funds to the startups. This fund will be used for proof of concept, prototype development, product trials, market-entry, and commercialization.

Under this scheme, startups through incubators will be provided financial assistance of up to Rs 50 lakh in the initial stage. Startup India Seed Fund Scheme will benefit 3600 entrepreneurs through 300 incubators in the next 4 years. The government has allocated a budget of Rs 945 crore for this scheme.

Name Of The Scheme	Startup India Seed Fund Scheme
Launched By	Government Of India
Beneficiary	Entrepreneurs
Benefits	Financial Assistance
Official Website	seedfund.startupindia.gov.in

Implementation Of Startup India Seed Fund Scheme

The Department for Promotion of Industry and Internal Trade will play the role of the nodal agency for the implementation of this scheme. An Expert Advisory Committee (EAC) has been constituted by the department which will implement, execute and monitor the Startup India Seed Fund scheme. This committee will select the incubators which will be allowed to seed fund. And also the details provided by the incubators will be verified by this committee. This committee will also monitor the progress of the incubator. The Expert Advisory Committee has the power to take all necessary actions so that the funds are utilized efficiently. The Expert Advisory Committee will have the following members:-

• Chairman
• Representative of the Department of Biotechnology
• Additional Secretary/Joint Secretary/Director/Deputy Secretary, D.P.IIT
• Representative of the Department of Science and Technology
• Financial Advisor, D.P.IIT
• Representative of the Ministry of Electronics and Information Technology
• Representatives of the Indian Council of Agricultural Research
• At least three members nominated by the Secretary
• Representative of NITI Aayog

Factors Determining The Successful Implementation Of the Startup India Seed Fund Scheme

• Progress of market launch
• Quantum of loan
• Progress of field trial
• Progress of proof of concept
• Progress of product development
• Progress of prototype development
• Jobs created by startup
• Turnover of startup

Note:- All the Startups selected to get the benefit of this scheme are required to provide the details on the above parameters to the Incubator. The incubator is required to provide the information provided by the Startup through an online dashboard and also to submit this information quarterly to the Expert Advisory Committee. In addition, the incubator is also required to report the startup’s return on investment.

What is Incubator?

Incubators are organizations that work to foster innovation and entrepreneurship among citizens. They basically provide funding and infrastructure to startups so that they can carry out their business activities of development, product testing, market entry, commercialization, etc.

The government will provide incentives to the incubators and the incubators will provide further funding to the startups. Under the Startup India Seed Fund Scheme 2022, the government will give grants to 300 incubators. The amount to be provided to startups under this scheme will be up to Rs 50 lakh.

Incubators can apply under the Startup India Seed Fund scheme through the official portal. After verifying their application, the government will provide them with seed funds. Startups can also apply under this scheme directly from the portal and select the incubators of their choice from there.

Incubator Seed Management Committee

The Expert Advisory Committee is responsible for the selection of the members of the Incubator Seed Management Committee.

• All the incubators applying under the Startup India Seed Fund scheme are required to constitute a committee called the Incubator Seed Management Committee. This committee will evaluate and select startups for seed funding. This committee consists of the following members:-
  • Representatives from the state government startup nodal team
  • Nominee of the incubator(Chairman)
  • Representative of venture capital fund or Angel network
  • Two successful entrepreneurs
  • Domain expert from the academy
  • Domain experts from the industry
  • Any other relevant stakeholder

Guidelines For Assistance To Incubators

• The Expert Advisory Committee will be responsible for awarding grants to the incubators.
• Expert Advisory Committee will disburse grants up to Rs 5 crore to the incubator in 3 or more installments
• The incubator can use the grant only for disbursement to eligible start-ups
• The right to decide the amount of grant-in-aid rests with the Expert Advisory Committee
• The incubator cannot use the grant for any other expenses
• 5% of the seed fund grant will also be provided to the incubator for management fees.
• The incubator is not authorized to use the management fees for any other expenses like facility creation or administrative expenses. This has to be used only for the management purpose
• The first installment of a grant provided to the incubator will be up to 40% of the total approved amount
• The next installment will be received by the incubator when the cash in hand goes below 10% of the total commitment
• The expert advisory committee will release the amount of the next installment within 30 days after the submission of proof.
• From the date of receipt of the first installment, the assistance amount should be used by the incubator within three years
• If the incubator has not used 50% of the grant within 2 years then no further amount will be provided to the incubator and the incubator is required to return the unutilized fund with interest
• The startup selected under this scheme are not required to pay any kind of fees
• The incubator has to provide the physical infrastructure to the startup in order to maintain regular functioning, support, development, etc
• An incubator is also responsible for providing networking with investors
• The incubator has to maintain a transparent process of selection of startups

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Seed Fund Disbursement To Startups By Incubators

Under the Startup India Seed Fund Scheme, all eligible startups will receive seed funds as follows:-

• Up to Rs 20 lakh as a grant in case of proof of concept, prototype development, or validation of product testing.
• Investment up to Rs 50 lakh for market entry, commercialization, and scaling up through convertible debentures of debt or debt-linked instruments.
• Startups are not allowed to use this fund for building any facility.
• At the end of the project period, the startup is required to submit a final report and audited utilization certificate of funds.
• If the venture fails, the entrepreneur is required to share his learnings and reasons for failure in the report. The report has to be submitted along with the utilization certificate of the fund amount.
• The first installment will be provided to startups within 60 days of receipt of the application form.
• Startups have to submit interim progress updates and utilization certificates to get the first installment.
• Startups will be provided funds in their company bank account.
• The second installment will be provided after the startup achieves the milestones set earlier.
• Before releasing the first installment, the incubator must enter into a legal agreement with the startup specifying all the necessary terms and conditions, milestones, etc.
• The incubator can provide startups with only 20% of the total funding they receive.
• A grievance cell will be constituted to solve the problems of the applicants.

Startup India Seed Fund Scheme Objective

The main objective of the Startup India Seed Fund launched by the Government of India is to grow the startups of entrepreneurs with available funds and also to create a strong startup ecosystem. To apply through this scheme, entrepreneurs have to approach banks and financial institutions with their business ideas.

The assistance received through the Startup India Seed Fund Scheme will meet the initial capital requirement at the right time. The scheme will generate a lot of employment and validate the business ideas of startups.

Startup India Seed Fund Scheme Benefits

• Startup India Seed Fund Scheme 2022 will help to build a Startup ecosystem.
• This scheme will provide opportunities for entrepreneurs to grow their enterprises.
• Under this scheme Financial assistance of up to Rs, 50 lacks will provide to startups at an early stage through incubators.
• This fund will be used for proof of concept, prototype development, product trial, market-entry, commercialization, etc.
• 3600 entrepreneurs through 300 incubators will get benefit from this scheme in the next 4 years.

Selection Procedure Of Incubators

• All the incubators across the country will be invited to participate in the Startup India Seed Fund scheme through the official portal or any other platform specially designed for the purpose.
• The following points shall be considered while selecting the incubator.
  • Quantum of funds applied
  • Deployment plan
  • Number of startups that the incubator intends to support
  • Mentoring provided in last 3 years (number of mentors hired, average mentoring hour, No of IP)
  • Funding support extended in the last 3 years (investment agreement, number of startups, total Corpus, total investment)
  • Incubation support in last 3 years (number of startups, success rate, number of startups that cross revenue of 1 crore in 1 year, survival rate of startup)
  • Composition of ISMC
  • Availability of infrastructure
  • Quality of team
  • Fulfillment of eligibility criteria
  • Other support (industry connects, stakeholder engagement)
• Expert Advisory Committee has the authority to make changes in the guidelines for the selection of incubators from time to time
• The expert advisory committee will also monitor the progress of the grant
• Incubators can apply under this scheme throughout the year.

NOTE:- The Expert Advisory Committee will review the progress of the Startup India Seed Fund with the selected incubators. For the purpose of objective evaluation under the scheme, the incubators are required to provide reports as directed by the Expert Advisory Committee.

The Expert Advisory Committee has full authority to discontinue the Seed Fund support if the incubator is not performing as per the standards. If the incubator is using the fund for other purposes then legal action will be taken against such incubator.

Selection Procedure Of Startups

• An open, transparent, and fair process should be followed while selecting startups
• The startup has to submit some details like team profile, problem statement, product overview, service overview, business model, etc.
• Startups can apply for seed funding in any of the 3 incubators as per preference
• All startups will be selected based on the eligibility criteria
• If the application is rejected, the applicant can apply afresh
• All rejected applicants will be informed about the rejection via email
• Applicants can also track the progress of their application on the official portal
• The incubator will select the startups and provide seed funding
• Startups have to provide a preference while filling out the application form and according to this preference the startup will be selected
• Startups will have to present their idea to the Incubator Seed Management Committee and based on this presentation the incubator will shortlist the applicants.
• Within 45 days of receipt of applications, the Incubator Seed Management Committee will evaluate the applicants based on their presentation and presentation and select eligible startups.

Eligibility Criteria

For Incubators:-

• The incubator must be a legal entity
• An incubator should be assisted by the Central or State Government
• The incubator should be operational for 2 years at the time of application
• The incubator should have a seating capacity of at least 25 persons
• On the date of application, the incubator should have at least 5 startups undergoing physical incubation
• A full-time Chief Executive Officer, who should have experience in business development and entrepreneurship, should be presented in the incubator and should be supported by a capable team.
• If the incubator is providing funding from any third private entity to the Incubatees then that incubator is ineligible
• If the incubator is not assisted by the Central or State Government, the incubator must have been operational for at least 10 years, must have submitted audited annual reports for at least 2 years, and must have maintained at least 10 records at the time of application There should be separate startups. undergo physiological incubation

For Startups:-

• The startup should be recognized by D.P.IIT
• At the time of application, the startup should not have been incorporated more than two years ago
• Must be a business idea initiated to develop a product or service that is suitable for the market, has scope for scaling, and has viable commercialization
• At the time of application to the incubator for the scheme, the shareholding by the Indian promoter in the Startup should be at least 51% or more as per the Companies Act 2013 and SEBI Regulation 2018.

Required Documents

• Aadhar card
• GST number
• Bank Account Details
• Lease Agreement
• Detailed Report of the Project
• Passport Size Photograph
• Mobile Number

How To Apply?

For Incubators:-

• First, visit the Official Website of the startup India seed fund scheme.
• The home page will open on your screen.
• On the homepage, click on Apply Now
• After that, click on Apply Now under for incubator section.
• Now, click on create an account
• A new page will open on your screen.
• On this page, enter your name, email id, mobile number, and password.
• After that, click on the register
• An OTP will send to your registered ID
• Enter this OTP into the OTP box.
• Now click on submit.
• After that, click on the login option.
• Now, select your country and click on the input letterbox.
• Now, click on the next option
• The Application form will open your screen.
• Enter your basic info, contact info, point of contact info, and success stories in this application form.
• After that, click on save profile
• Now your profile will send to a moderator for approval.
• You have to again login on to the portal
• Now click on apply now under the seed fund scheme
• The Application form will open on your screen.
• Enter all the required details in this application form like general detail, incubator team detail, incubator support detail, fund requirement details, etc.
• After that, Upload all the necessary documents.
• After completing the above procedure click on submit.
• By following this procedure you can apply under the startup India seed funds scheme.

For Startups:-

• First, visit the Official Website of the startup India seed fund scheme.
• The home page will open on your screen.
• On the homepage, click on apply now.
• After that, click on apply now under the startup section
• After that application form will appear on your screen.
• In this application form, enter all the required details like your name, email address, mobile number, etc
• After that, upload all the required documents
• Now click on submit
• By following this procedure you can apply as a startup under the startup India seed fund scheme.

How to Login

• Visit the Official Website of the startup India seed fund scheme
• The home page will open on your screen.
• Now click on the login
• After that choose your category which is as follows:-
  • Incubator/startup
  • D.P.IIT/EAC
• Now enter your username and password.
• After that, click on the login
• By following this procedure you can log in to the portal.

Contact Us

• First, visit the Official Website of the startup India seed fund scheme
• The home page will open on your screen.
• Now click on the contact
• A new page will appear before you
• Enter the following details on this new page:-
  • Name of the entity
  • Entity type
  • Name
  • Location
  • Query type
  • Message
  • Email ID
• After that click on submit.

Some Important FAQs