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What is Startup India?
Firstly, The Government of India’s Startup India initiative plans to create a strong start-up ecosystem to nurture innovation and provide opportunities for emerging entrepreneurs.
The action plan sets out a blueprint for creating an optimal ecosystem for start-ups in India. Following that, several measures may take to encourage start-ups. The Startup India Seed Fund Scheme (SISFS) is one such scheme that provides financial assistance to start-ups.
What is Startup India Seed Fund Scheme?
Entrepreneurs need easy access to capital in the early stages of a company’s growth.
Hence Funding from angel investors and venture capital firms will be available to startups only after proof of concept is provided.
Similarly, banks offer loans only to property support applicants. It is essential to offer seed funding for startups with innovative ideas to conduct evidence of concept tests.
DPIIT has developed the initial Indian Seed Fund Scheme (SISFS) at INR 945 crore to provide financial assistance for start-up evidence, prototype development, product testing, market-entry, and also commercialization.
It will support 3,600 entrepreneurs through 300 incubators over the next 4 years. Seed funding will be provided to eligible start-ups through qualified incubators across India.
Objectives of SISFS
The Indian Ecosystem is plagued by a lack of capital in seeds and a ‘conceptual’ growth stage.
While The capital required at this stage often provides a creating or breaking environment for startups with good business ideas.
Many innovative business ideas have not been picked up due to the lack of this important capital. This also needs at an early stage for the concept, concept development, product experiments, market-entry, and commercialization.
The seed funding provided for such promising cases will have many times the effect of validating the business ideas of many start-ups, leading to job creation.
Moreover, The Startup India Seed Fund Program (SISFS) aims to provide funding for start-up concept, prototype development, product testing, market entry, and commercialization.
This will enable these start-ups to raise investments from angels or venture capitalists or to the point. Where they can obtain loans from commercial banks or financial institutions.
Requirement of Startup India Seed Fund Scheme
Entrepreneurs need easy access to capital in the early stages of a company’s growth.
Funding from angel investors and venture capital firms will be available to startups only after proof of concept is provided. Similarly, banks offer loans only to property support applicants.
Eligibility
It is essential to offer seed funding for startups with innovative ideas to conduct evidence of concept tests.
1. A startup approved by DPIIT has not affiliated 2 years ago at the time of application.
2. The business idea at the beginning should be to create a service with a product or a market fit, potential commercialization, and also scaling.
3. The startup must use technology to solve its core product or service, or business model, or distribution model, or targeted problem.
4. Priority will be given to initiatives that create innovative solutions in areas such as social impact, waste management, funding, education, agriculture, health, energy, mobility, railways, oil and gas, and textiles.
5. The start-up should not have received financial help of more than Rs.10 lakhs under any Government scheme. This does not include prize money from competitions and major challenges, work with a grant, founder’s monthly stipend, access to labs, or access to a prototype facility.
6. According to the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018, the share of Indian advertisers should be at least 51% initially when applying for an incubator.
7. A start-up applicant can avail of seed support in the form of grants and loan / convertible debentures every time as per the guidelines of the scheme.
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