What is Startup India Seed Fund (SISF)? How to apply for SISF? All you need to know about Startup India Seed Fund!

To boost the Startup ecosystem in India, Shri Piyush Goyal, Honourable Cabinet Minister for Railways, Commerce and Industry, Consumer Affairs, Food, and Public Distribution launched the Startup India Seed Fund Scheme on 19^th April 2021 with an outlay of Rs. 945 Crores by the Department of Promotion of Industry and Internal Trade (DPIIT). The Scheme was announced during the ‘Prarambh: Startup India International Summit’ which marked the five-year anniversary of the Startup India initiative.

This scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.

Key Features:

• It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
• An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
• Grants of upto Rs. 5 crores will be provided to the eligible incubators selected by the committee.
• The selected incubators will provide grants of up to Rs. 20 lakhs for validation of proof of concept, or prototype development, or product trials to 
• Investments of up to Rs. 50 lakhs will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.

Department for Promotion of Industry and Internal Trade (DPIIT) has created an Experts Advisory Committee (EAC) to execute and monitor the Startup India Seed Fund Scheme. The EAC will select eligible incubators who will be provided grants of upto Rs 5 Crores each. In turn, the selected incubators will provide startups with up to Rs 20 lakhs for validation of Proof of Concept, prototype development, product trials to startups.

Moreover, up to Rs 50 lakhs shall be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments. Detailed guidelines of the Startup India Seed Fund Scheme are available on the Startup India portal.

It is anticipated that the startups that receive support at their early stages shall create significant employment opportunities for everyone.

Eligibility Criteria for Startups: The eligibility criteria for a startup to apply under the Startup India Seed Fund Scheme shall be as follows:

1. A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application
2. The startup must have a business idea to develop a product or a service with the market fit, viable commercialization, and scope of scaling
3. The startup should be using technology in its core product or service, or business model, or distribution model, or methodology to solve the problem being targeted
4. 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, defense, space, railways, oil and gas, textiles, etc.
5. A startup should not have received more than Rs 10 lakh of monetary support under any other Central or State Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility
6. Shareholding by Indian promoters in the startup should be at least 51% at the time of application to incubator for the scheme, as per Companies Act, 2013 and SEBI (ICDR) Regulations, 2018
7. Any startup will not receive seed support more than once each as per provisions of guidelines.

Eligibility Criteria for Incubators: The eligibility criteria for an incubator to apply in the Startup India Seed Fund scheme are as follows:

1. The incubator must be a legal entity:
2. a)  A society registered under the Societies Registration Act 1860, or
3. b) A Trust registered under the Indian Trusts Act 1882, or
4. c) A Private Limited company registered under the Companies Act 1956 of the Companies Act 2013, or
5. d) A statutory body created through an Act of the legislature
6. The incubator should be operational for at least two years on the date of application to the scheme
7. The incubator must have facilities to seat at least 25 individuals
8. The incubator must have at least 5 startups undergoing incubation physically on the date of application
9. The incubator must have a full-time Chief Executive Officer, experienced in business development and entrepreneurship, supported by a capable team responsible for mentoring startups in testing and validating ideas, as well as in finance, legal, and human resources functions
10. The incubator should not be disbursing seed funds to incubatees using funding from any third-party private entity
11. The incubator must have been assisted by Central/State Government(s)
12. In case the incubator has not been assisted by Central or State Government(s):
13. a) Incubator must be operational for at least three years
14. b) Must have at least 10 separate startups undergoing incubation in the incubator physically on the date of application
15. c) Must present audited annual reports for the last 2 years
16. Any additional criteria may be decided by the Experts Advisory Committee (EAC).

To know more about Startup India Seed Fund or to apply as an Incubator or startup, visit the official website of Startup India Seed Fund - https://seedfund.startupindia.gov.in/