Apply for Startup India Seed Fund Scheme(SISFS) Online with ease and turn your business ideas into reality!

Avail Startup India Seed Fund Scheme and get financial assistance for your startup even for proof of concept, prototype development, product trials, market entry, and commercialization!

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Overview

When a business is still young, it needs access to finance as easily as possible so that its founders may focus on building the business. Once a business has shown its concept, it will be eligible to get funding from angel investors and venture capital firms. Similarly, banks only lend to applicants with collateral.

As a result, many startups at seed stage or incubator stage miss many opportunities to grow and establish themselves in the market. The Government of India, considering this, introduced the Startup India Seed Fund Scheme on the 16th of January 2014 to generate opportunities through financial and other means of support for the development of small startups in an effort to create a startup-friendly environment. In short, the Startup India is an initiative to aid startups at incubator stage so they can also grow and contribute to the economy.

What is Startup India?

Startup India is a flagship initiative by the Government of India that aims to catalyse startup culture and create a robust and inclusive environment for entrepreneurs and innovation in India. Since its inception on January 16, 2016, Startup India has implemented a variety of programs aimed at assisting entrepreneurs and changing India into a country of employment generation rather than job seekers.

What is Startup India Seed Fund Scheme?

Startup India Seed Fund Scheme (SISFS) is designed to provide financial support to startups to demonstrate concepts prototyping and product testing as well as market entry and commercialization. The scheme is offered under the banner of Startup India initiative. This will allow these startups to progress to a stage in which they can secure investment from angel investors, venture capitalists or request business loans from financial institutions.

Aim of the Startup India Seed Fund Scheme (SISFS)

The availability of capital in a timely manner is vital for entrepreneurs in the beginning stages of the expansion of their company.

Angel investors' funds and venture capitalists are available to startups after proof of concept is provided. In the same way, banks offer loans only to those who have assets.

It is crucial to offer startup companies that have innovative concepts to test their ideas through proof of concept tests. Hence, an innovative idea also needs funding to conduct proof of concepts.

Therefore, the Startup India Seed Fund Scheme (SISFS) aims to give financial assistance to entrepreneurs for Proof of Concept, prototype development, product testing, market entrance, and commercialization.

Key Features of the Startup India Seed Fund Scheme

#1. No mandatory physical incubation

#2. Startups can apply to 3 Investors simultaneously

Benefits of the Startup India Seed Fund Scheme

#1. Through the Startup India Seed Fund Scheme, financial support of up to Rs 50 lakh would be provided to entrepreneurs in their early stages via incubators.

#2. The grant is disbursed on milestones basis.

#3. Your startup becomes eligible for government tenders.

#4. As an entrepreneur, you get opportunities to network with other entrepreneurs and business experts.

#5. Registering under Startup India Seed Fund Scheme is a simple procedure as you need to submit an application form online.

#6. High-quality Intellectual Property Right Services including Trademark Registration and Patent Registration are provided at discounted rates.

#7. Obtaining approval from the Inter-Ministerial Board will result in a three-year period during which a startup is free from paying income tax.

#8. Startups in the research and development industry will have access to space in one of seven new Research Parks.

#9. The numerous compliances have been streamlined for startups to save their time and money. Compliance can be self-certified by startups.

#10. People who put their capital gains into government-sponsored venture funds are eligible for a tax break on such earnings. There will be an increase in the number of people willing to invest in new businesses as a result of this.

#11. Startups get access to the fast track winding up or company strike off process

Eligibility Criteria to avail Startup India Seed Fund Scheme for Startups

#1. Startup should be registered as Private Limited Company or LLP

#2. Startup age should be less than 2 years

#3. Startups must be registered under the Government led Startup India Scheme.

#4. Service or product must have the potential for commercialization, market fit, and scaling.

#5. A startup must not have received more than Rs 10 lakh in funding from any other Central or State Government initiative.

Other Important Points

#1. To address the specified issue, a startup's central service, product, distribution mechanism, business model, or approach must have some form of technological implementation.

#2. Companies with a focus on social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railroads, oil and gas, textiles, etc. will be given priority.

Type Of Funding Available under Startup India Seed Fund Scheme

Equity
The Startups through Startup India Scheme can get funds through providing a portion of equity to venture capitalists and managing all their accounts using incubators. The equity portion to sell can also be negotiated.

Convertible Debenture
You can also get funding through convertible debentures under Startup India Seed Fund Scheme. It means you will get funds and your company’s pre-decided number of shares will be acquired by the angel investors after a specific period. There will not be any collateral for the debt that you take through convertible debenture funding.

Business Loan
The Startup India Seed Fund Scheme offers you loans from lenders, financial institutions, or commercial banks. These loans can also be collateral-free.

How E-StartupIndia assists you in filing an application for Startup India Seed Fund Scheme?

  • 1

    Step 1

    Free Consultation with our experts to understand the document requirement & preparation, scheme benefits and get your all queries resolved.

  • 2

    Step 2

    After successful submission of documents and the payment, our Startup India Seed Fund Scheme Experts will file your application.

  • 3

    Step 3

    Once the government approves your application, you will receive the acknowledgement of the same to your email.

Disbursement Mechanism of Seed Fund by Incubators to Startups

#1. The maximum amount of funding that may be distributed to entrepreneurs by the incubator is 20%.

#2. Debt, convertible debentures, and debt-linked instruments can provide up to Rs.50 lakh for business purposes like commercialization, market entry, and scaling.

#3. Startups must put the seed money to its intended use and not spend it on building new facilities.

#4. Grants of up to 20 lakh rupees are available to fund the creation and testing of prototypes, proofs of concept, or products. The incubator will distribute the grant in stages commensurate with the completion of milestones such as prototyping, product development, product testing, etc.

#5. Before delivering the initial portion, the incubator will enter into a legally binding agreement with the qualified startups.

#6. Subsequent instalments will be paid based on the incubator's and the startup's mutually agreed upon milestones.

#7. The money for the startups will be deposited into their business bank accounts.

#8. Up to Rs.50 lakhs of investment can be used for market entry, commercialisation or for scaling up with debt convertible debentures, debt-linked instruments.

#9. The incubator must set the term of the loan when it approves the loan, however it must not be longer than 5 years. A period of 12 months may be granted for startups.

#10. The loans approved by the incubator are not guaranteed due to the infancy stage of the startup. So, the promoter, or any third party cannot provide any guarantees.

#11. Initial funding for a qualified startup will be disbursed within 60 days of the company's application being received.

#12. Before the next instalment of funding may be dispersed, the qualifying startup must provide a certificate of use and a status report on the project's development so far.

#13. Funds shall be provided at a rate of interest of not more than prevailing repo rate.

#14. The debt based funding tenure should be fixed at the time of sanctioning the loan by the incubator, which shall be not more than 60 months (5 years).

#15. Startups will receive the funds in their company bank accounts

#16. Startup shall submit final report and audited utilisation certificate at the end of the project duration. For failed ventures, the entrepreneur will share his/her learnings and the reasons for failure in the report and submit this along with the utilisation certificate for the fund amount.

Document Checklist to obtain Startup Seed Fund Scheme

#1. Company Incorporation Documents

#2. GST Registration Details

#3. DPIIT Recognition or Startup India Certification

#4. Application of Recognition

#5. A Non-Disclosure Agreement (NDA)

#6. Employee Contracts and Offer Letters

#7. Shareholder’s Agreement

#8. Bylaws

#9. Intellectual Property Assignment Agreements

#10. Founder/ Co-Founder Agreement

#11. Business Plan/ Pitch Deck .

#12. Details about patent and trademark.

#13. Director’s Complete Profile Verification Details.

#14. PAN Card Number

Document Checklist to  obtain Startup Seed Fund Scheme

Talk to Advisors

Why Choose E-StartupIndia?

E-Startup India is a professional team comprised of chartered accountants, company secretaries, lawyers and business experts that are working toward the integration of technology and traditional business practices in order to serve businesses including micro, small, and medium-sized enterprises (MSMEs) in a world that is both highly competitive and fast moving. We cater to the needs of small businesses operating in India by providing a wide range of online services, such as business registration, tax registration, ISO certification, doing accounting, and ensuring legal and financial compliance. We have excellent ratings from our clients and we all at E-Startup India aim to assist you so that you can grow your business. Through availing our Startup India Seed Fund Scheme application service, you will be easily able to turn your dreams into reality. Your business ideas in reality will get wings to fly and help you achieve your business goals.

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frequently asked questions
  • Up to Rs.50 lakhs of investment can be used for market entry, commercialisation or for scaling up with debt convertible debentures, debt-linked instruments.

  • Grants of up to 20 lakh rupees are available to fund the creation and the testing of prototypes, proofs of concept, or products.

Support applications from sole proprietors will be rejected. The SISFS is only open to startups that have been approved by DPIIT.

 

Certainly not, because it is not specific to any industry, SISFS welcomes applications from entrepreneurs of any field. However, companies with a focus on social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railroads, oil and gas, textiles, etc. will be given priority. 

 

There is no minimum education qualification required for founders to apply for Startup India Seed Fund Scheme. 

 
  • If it is formed as a Private Limited Company, Registered Partnership Firm, or Limited Liability Partnership. A sole proprietorship or a public limited business are ineligible for startup funding.

  • If it has been up to ten years from its incorporation/registration

  • If its revenue for any of the fiscal years did not reach INR 100 crore

  • If it works to innovate, create, or upgrade goods, processes, or services, or if it is a scalable business model with a strong potential for job creation or wealth creation.

  • Should not have been founded through the division or restructuring of an existing firm.

Yes, you can reapply for the Startup India Seed Fund Scheme after three months of refusal. This buffer period is provided to ensure that you have addressed the input from incubators and are ready to be evaluated again.

Seed funds must only be used for the purpose for which they were awarded. Proof-of-Concept testing, prototype creation, and product trials are all viable uses of a grant's funding. Debt or a convertible debenture can be utilised for any of these three expansion strategies: entering new markets, becoming commercial, and expanding current systems.

 

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