With the launch of the StartUp India Scheme by the Government of India, there has been a wave of tech-fueled entrepreneurship in India where more and more enterprising individuals are launching their startups to transform the national marketplace through their innovative products, services and ideas. However, building a startup is no easy task, especially for entrepreneurs with limited means and experience. Taking cognizance of this situation, the Government of India has introduced various measures to help augment the overall support ecosystem especially in relation to mentoring, incubation and funding measures. The StartUp India Seed Fund Scheme is a Central Government Scheme is one such initiative. Launched on 19 April 2021, it intends to provide financial support and assistance to young entrepreneurs and startups in the country and also intends to streamline the process for incubators to connect and support these startups.
StartUp India Seed Fund Scheme (SISFC) is aimed at providing financial assistance for startups for proof of concept, prototype development, product trials, market entry and commercialization. The scheme is open to all startups that are recognized by the Department for Promotion of Industry and Internal Trade (DPITT) and incorporated a maximum of two years before the launch of the scheme. Applications to the scheme are accepted at the Startup India portal and selected startups receive the seed fund through eligible incubators nationwide.
The scheme offers upto ₹20 Lakh as a grant for the purposes of validating proof of concept, prototype development and product trials. The manner of disbursement is stated to be in the form of milestone based installments, which shall be related to the development of prototype, product testing, and building a product ready for market launch. The scheme also offers an amount upto ₹50 Lakh as investment for the purpose of market entry, commercialization, and scaling up through different debt instruments. SISFC is aimed at promoting entrepreneurship all over the country across sectors, and thus is sector-agnostic, although preference is given to startups providing innovative solutions in socially-impactful sectors such as waste management, financial inclusion, education, agriculture etc.
The StartUp India Seed Fund Scheme (SISFC) also offers considerable benefits and opportunities to incubators associated with the StartUp India Scheme. All incubators are eligible for the scheme, those that are Government-supported must have started at least 2 years before the onset of the scheme whereas those that are not government-supported ought to have been started three years prior to the launch of the scheme. Support is extended to incubators upto an amount of ₹ 5 crore in milestone-based installments, with the exact amount determined as per the evaluation criteria of the Experts Advisory Committee (EAC). Among some responsibilities as expected of the incubators under the scheme, are providing physical infrastructure to startups, regular mentoring and providing opportunities for networking with investors and showcasing products at summits and events, both nationally and internationally.
The StartUp India Seed Fund Scheme (SISFC) is a major step in creating a supportive and encouraging environment and ecosystem for the growth, development and promotion of entrepreneurship in India and also deepening the material support, in terms of funding, financial assistance, performance-driven grants and proper investment infrastructure. By opening up these avenues to both startups and incubator organizations, it also strengthens the overall infrastructure to support critical knowledge transfer and institutional relationship-development that is necessary for the proper functioning and growth of an indigenous startup scene. Steps like these portend to a very bright future for young entrepreneurs across India. Further information about the scheme can be accessed on its website -https://seedfund.startupindia.gov.in/