by Seed Fund
Easy availability of capital is essential for entrepreneurs at the early stages of growth of an enterprise.
Funding from angel investors and venture capital firms becomes available to startups only after the proof of concept has been provided. Similarly, banks provide loans only to asset-backed applicants.
It is essential to provide seed funding to startups with an innovative idea to conduct proof of concept trials.
Objective Of the Scheme
Startup India Seed Fund Scheme (SISFS) aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.
This would enable these startups to graduate to a level where they will be able to raise investments from angel investors or venture capitalists or seek loans from commercial banks or financial institutions.
Eligibility:
For Startups
A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
The startup must have a business idea to develop a product or a service with a market fit, viable commercialization, and scope of scaling.
For Incubator
The incubator must be a legal entity:
– A society registered under the Societies Registration Act 1860, or
– A Trust registered under the Indian Trusts Act 1882, or
– A Private Limited company registered under the Companies Act 1956 or the Companies Act 2013, or
– A statutory body created through an Act of the legislature
The incubator should be operational for at least two years on the date of application to the scheme
The incubator must have facilities to seat at least 25 individuals
The incubator must have at least 5 startups undergoing incubation physically on the date of application
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
The incubator should not be disbursing seed fund to incubatees using funding from any third-party private entity
The incubator must have been assisted by the Central/State Government(s)
In case the incubator has not been assisted by the Central or State Government(s):
– The incubator must be operational for at least three years
– Must have at least 10 separate startups undergoing incubation in the incubator physically on the date of application
– Must present audited annual reports for the last 2 years
Any additional criteria as may be decided by the Experts Advisory Committee (EAC)
ASPIRE
A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) aids to set up a network of technology centres and to set up incubation centres to accelerate entrepreneurship and also to promote startups for innovation in agro-industry. ASPIRE provides financial support to set up Livelihood Business Incubators (LBI) or Technology Business Incubator (TBI).
Objectives
The main objectives of the scheme are to:
- Create new jobs and reduce unemployment
- Promote entrepreneurship culture in India
- Grassroots economic development at the district level
- Facilitate innovative business solution for unmet social needs
- Promote innovation to further strengthen the competitiveness of MSME sector.
