STARTUP INDIA SEED FUND

SCHEME (SISFS)
POINTS COVERED
➢ OVERVIEW
➢ ELIGIBILITY CRITERIA FOR STARTUPS
➢ DPIIT STARTUP RECOGNITION FOR STARTUPS
➢ PROCESS OF SISFS APPLICATION
➢ EVALUATION CRITERIA OF ISMC
➢ HOW STARTUP INDIA SEED FUNDS DISBURSED?
➢ SEED FUNDS AVAILABLE FOR STARTUPS
➢ POINTS ON DISBURSEMENT
➢ TIMELINE FOR DISBURSEMENT OF FUNDS TO STARTUPS
➢ ELIGIBILITY CRITERIA FOR INCUBATORS
➢ PARAMETER FOR SELECTION OF INCUBATORS
➢ FUNDS TO INCUBATORS
➢ ACCOUNTING AND UTILIZATION OF FUNDS
OVERVIEW
● Startup India Seed Fund Scheme (SISFS) offers financial assistance to startups for proof
of concept, prototype development, product trials, market-entry, and commercialization.
● It is offered by Department for Promotion of Industry and Internal Trade of Ministry of
Commerce and Industry.
● Startups recognized by DPIIT and incorporated not more than 2 years ago can apply.
● Funding includes up to ₹20 Lakhs as a grant and up to ₹50 Lakhs for market entry
or scaling up through debt or convertible debentures.
● The scheme is sector-agnostic, though preference may be given to certain innovative
sectors
SEED FUNDS AVAILABLE FOR START-UPS
Upto Rs.20 Lakhs
● Available as Grant
● For validation of Proof of
Concept, or prototype
development, or product trials
● Disbursed in milestone-based
installments
● Milestones can be related to
development of prototype,
product testing, building a
product ready for market
launch, etc
Upto Rs.50 Lakhs
● Available as convertible
debentures or debt or debt-linked
instruments
● For market entry,
commercialization, or scaling up
● Provided at a rate of interest of
not more than prevailing repo rate
● Tenure: Not more than 60 months
● Moratorium period: 12 months
● No guarantee required.
POINTS ON DISBURSEMENT
● Seed fund shall strictly not be used by startups for creation of any
facilities and shall be utilized for the purpose it has been granted for
● The incubator shall execute a legal agreement with the selected
startups before the release of the first installment.
● Startups will receive the funds in their company bank accounts
● For grants, the first installment to any selected startup shall be
released not more than 60 days from receipt of application from the
startup.
● 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.
TIMELINE FOR DISBURSEMENT OF FUNDS TO STARTUPS

Application for SISF If Application accepted

Within 45 Days Disbursement of first installment
from application

Within 60 Days from

Acceptance/ Rejection of application
Application
ELIGIBILITY CRITERIA FOR STARTUPS

STARTUP NOT RECEIVED

RECOGNITION SHOULD BE MORE THAN SHAREHOLDING
BY DPIIT & USING RS.10 LAKH OF BY INDIAN
INCORPORATED PROMOTERS
TECHNOLOGY MONETARY
NOT MORE SHOULD BE AT
THAN 2 YEARS IN ITS CORE SUPPORT UNDER
PRODUCT OR ANY OTHER LEAST 51% AT
AGO AT THE
TIME OF SERVICE, AND GOVT. SCHEME. TIME OF
APPLICATION CREATE (DOES NOT APPLICATION
INCLUDE PRIZE
INNOVATIVE
MONEY)
SOLUTIONS

Application Guide:https://seedfundapi.startupindia.gov.in:3535/Downloads/SeedFund-
Guide_for_Startups_02.08.2021.pdf
DPIIT STARTUP RECOGNITION FOR STARTUPS
INCORPORATED
AS A PRIVATE
LIMITED
COMPANY/
PARTNERSHIP
FIRM/ LIMITED
LIABILITY
PARTNERSHIP
TURNOVER DATE OF
LESS THAN INCORPORATIO
RS.100 CRORE N IS LESS THAN
IN ANY OF THE 10 YEARS
PREVIOUS FROM DATE OF
YEARS APPLICATION

Application Link: https://www.startupindia.gov.in/content/sih/en/startupgov/startup_recognition_page.html

PROCESS OF SISFS APPLICATION
Applicant may be asked to submit
Applicant can apply for
details on team profile, problem
statement, product/service
1 funds to any three incubators
overview, business model, customer in order of preference
profile, market size, quantum of
funds needed, projected utilization 2
plan for funds, etc. ISMC (Incubator Seed
3 Management Committee) of
incubator will evaluate
Fund will be disbursed to
applicants as per their
selected startups within 45 4
criteria
days of date of application.

5 Application progress can be

tracked on real time basis and
rejected applicants will be
informed through mail.
Reapplication allowed after 3
months of receiving rejection
EVALUATION CRITERIA OF ISMC
Criteria Details

Is there a need for this Market size, what market gap is it filling, does it solve a real-world
Idea? problem?

Feasibility Feasibility and reasonability of the technical claims, methodology

used/ to be used for PoC and validation, roadmap for product
development

Potential Impact Customer demographic & the technology’s effect on these, national
importance (if any)

Novelty USP of the technology, associated IP

Team Strength of the team, Technical and business expertise

Fund Utilization Plan Roadmap of money utilization

Additional Parameters Any additional parameters considered appropriate by incubator

Presentation Overall assessment

HOW STARTUP INDIA SEED FUNDS DISBURSED?

Approved Incubators: https://seedfund.startupindia.gov.in/portfolio

ELIGIBILITY CRITERIA FOR INCUBATORS
Central/State Govt Assisted
● Must be a legal entity (society, trust, Pvt
Ltd co., Statutory body created through an
Act of legislature)
● Operational for at least two years on the
date of application
● Facilities to seat at least 25 individuals
● At least 5 startups undergoing incubation
physically on the date of application
● 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
Approved Incubators: https://seedfund.startupindia.gov.in/portfolio
Non- Govt Assisted
● Must be a legal entity (society, trust, Pvt
Ltd co., Statutory body created through an
Act of legislature)
● Operational for at least Three years on the
date of application
● Facilities to seat at least 25 individuals
● At least 10 startups undergoing incubation
physically on the date of application
● 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
PARAMETER FOR SELECTION OF INCUBATOR
Available Composition of
Fulfillment of Quality of Team of
Infrastructure, testing Incubator Seed Mgt
eligibility criteria Incubator
labs etc. Committee (ISMC)

Quantum of funds
Number of startups Any other parameters
applied for, along
that the incubator that decided by the
with deployment plan
intends to support EAC
with timelines

Application Guide:https://seedfundapi.startupindia.gov.in:3535/Downloads/SeedFund-Guide_28.04.2021.pdf
 PARAMETER FOR SELECTION OF INCUBATOR
Incubation support
provided by incubator in
last three years:
➢No. of startups incubated
➢No. of startups graduated,
i.e. progressed from one
stage of
➢business development
cycle to the next
➢No. of startups that raised
follow on investments
➢No. of startups that
crossed a revenue of Rs 1
Cr in last 1 year
➢2-year survival rate of
startups from the date of
joining incubator
Funding support
extended to incubatees in
last three years:
➢Investment agreements
signed between incubator
and startups
➢No. of startups invested in
➢Total corpus allocated to
incubatees
➢Total investments raised
by incubatees from
external sources
Mentoring provided to
incubatees in last three Other support extended
years: to incubatees in last
three years:
➢No. of mentors hired
➢Average mentoring ➢Industry/Corporate
hours allocated per connects
startup per month ➢Events held for
➢No. of IP (patents,
stakeholder engagements
copyrights, designs, and ➢Participation in other
trademarks) events
➢registered by incubatees
FUNDS TO INCUBATORS
➢ Grant of up to Rs. 5 (five) crore would be provided to a selected incubator in milestone-based
three (or) more installments. Exact quantum decided by EAC
➢ A component of Management Fee @ 5% of Seed Fund grant to the incubator will be provisioned
(i.e. if an incubator is granted Rs. 1 crore of Seed Fund, then by including management fee @ 5%,
the total assistance would be Rs. 1.050 crore)
➢ The Management Fee will be utilized for administrative expenditure, selection and due diligence
of startups, and monitoring of progress of beneficiary startups
➢ The quantum of first installment may be up to 40% of total approved commitment. When the
cash-in-hand of the incubator goes below 10% of the total commitment by EAC, the Incubator
may request for the next installment, which shall be released to incubator within 30 days of
submission of proof of achievement of milestones
➢ The grant should be utilized fully by the incubator within a period of three years from the date of
receipt of the first installment of funds.
FUNDS TO INCUBATORS
➢ If the Incubator has not utilized at least 50% of the total commitment within the
first 2 years, then the Incubator will not be eligible for any further drawdowns.
It will return all unutilized funds along with interest
➢ Interest earned on all unutilized funds available with incubators shall be taken
into account and adjusted at the time of next release.
➢ A startup selected by an incubator for assistance under this scheme shall not
be charged any fees
➢ Not more than 20% of the total grant to an incubator shall be given as grants to
start-ups by incubator.
➢ An incubator can reapply for funds under the Scheme when it has disbursed or
committed its entire previously released grant
ACCOUNTING AND UTILIZATION OF FUNDS
➢ The incubator shall maintain an exclusive, project-specific Trust and
Retention Account (TRA) with any nationalized bank in which funds will be
transferred
➢ Any net return received from beneficiary startup can be used for further
funding in startups as per guidelines of this scheme (net returns shall
include principal, interest, and profits).
➢ Each incubator shall report the funds sanctioned, received, and disbursed
to each startup for each financial year
➢ Incubators would also submit detailed report on status of utilization of
funds and audited expenditure for each financial year
THANK YOU