Startup India Seed Fund Scheme

Startup India Seed Fund Scheme

News: Recently, the Ministry of Commerce and Industry has approved Rs. 477.25 crore under the Startup India Seed Fund Scheme (SISFS), which is a flagship Scheme under Startup India Initiative.

What is Seed Funding?
 Seed Funding is an early stage of investment in a start-up or a new business idea. The goal of seed funding is to help the company reach a point where it can secure additional rounds of funding or generate revenue to become self-sustaining.

About SISFS:
 The scheme was announced at Startup India International Summit on 16th January 2021.
 DPIIT approved an outlay of Rs. 945 Crore for the period of 4 years starting from 2021-22 to provide financial assistance to startups for Proof of Concept, prototype development, product trials, market entry, and commercialization.
 An Experts Advisory Committee (EAC) has been constituted by DPIIT, which will be responsible for the overall execution and monitoring of the Startup India Seed Fund Scheme.

What are the Eligibility criteria?
 A startup, recognized by DPIIT (Ministry of Commerce and Industry), incorporated not more than 2 years ago at the time of application.
 Startups should not have received more than Rs. 10 lakhs of monetary support under any other Central or State Government scheme.
 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, defence, space, railways, oil and gas, textiles, etc.
 The scheme is likely to support around 3600 entreprenuers and grants worth 5 crores are likely to be provided to eligible incubators selected by Committee.

How will Seed Funds help?
 Easy availability of working capital at early stages which means lesser dependence on crowd funding, boot strapping.
 The Indian startup ecosystem suffers from capital inadequacy in the seed and ‘Proof of Concept’ development stage. The capital required at this stage often presents a make-or-break situation for startups with good business ideas.
 Many innovative business ideas fail to take off due to the absence of this critical capital. Seed Fund offered to such promising cases can have a multiplier effect in validation of business ideas of many startups, leading to employment generation.

What are other initiatives to promote Startups?
 Ranking of States on Support to Startup Ecosystems
 National Startup Awards
 Startup Innovation Challenges
 SCO Startup Forum
 Prarambh Summit