Startup India Seed Fund Scheme (SISFS)

Startup India Seed Fund Scheme (SISFS): An Overview:

This scheme is meant to provide financial assistance to start-ups in lines where a start-up has certain requisites such as proof of concept, prototype under development, commercial factors or any product under trials. The SISFS aims to disburse the seed funding via selected & eligible incubators whole primary role is to provide funding to eligible start-ups.
The total financial assistance for start-ups lies in a corpus worth Rs. 945 Crore. This corpus is to be distributed throughout 2021-2025.

Eligibility for Startup India Seed Fund Scheme:

For accessing the said corpus, start-ups need to have the following eligibility criteria:

1) For Start-Ups:

• Recognized by DPIIT
• At least 2 years of Incorporation
• A valid business idea to develop a product/service 
• Viable product idea with a proper target market to fit in 
• Usage of technology for its core products/service in its business model
• Preference to be given to innovative solutions in various sectors like eg: social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defense, space, railways, oil and gas, textiles, etc.
• A pre-investment should not be more than Rs. 10 Lakh under any other scheme (not including prize money or subsidized workspace). & many more compliances.

2) For Incubators:

Registered as a Legal Entity: Either registered under the Societies Registration Act 1860, or Trust registered under the Indian Trusts Act 1882, or Private Limited company registered under the Companies Act 1956, or the Companies Act 2013, or Private Limited company registered under the Companies Act 1956, or the Companies Act 2013, or statutory body created through an Act of legislature.

• At least 2 years of Incorporation
• Having seating facilities for 25 individuals
• Having valid start-ups under its umbrella
• Must have full-time employees (Chief Executive Officer, mentors, support staff, finance, legal, and human resources staff)
• No third-party disbursal of seed funding
• Assisted by Central/state govt.; if not must be operational for 3 years
• Mandated to have at least 10 different start-ups undergoing incubation
• Having audited annual reports for the past 2 years from the date of application.

Role of Expert Advisory Committee:

The EAC is founded by DPIIT, the DPIIT itself would be responsible for the overall program development & monitoring of the Scheme. It will also be responsible for the evaluation & selection of incubators for the Scheme. 
This committee shall also be evaluating the grant for incubators which has a corpus worth 5 crores. This would be provided to a select number of incubators with the spread of 3 installments. 

Startup India Seed Fund Scheme; Fund Disbursement:

The eligible start-ups would receive the funds The Seed Fund shall be eligible by the incubator in the following stages:

• Upper limit of Rs.20 Lakh as grant (for Proof of Concept, or prototype development, or product trials; further into installments.
• The installments shall be released as and when stages are reached in the start-up process eg: development of a prototype, product testing, building a product ready for market launch, etc.
• Upper limit of Rs.50 Lakh for investment for commercialization purposes.

Note: The fund shall not be used for any other purpose apart from stages as mentioned above & shall only be used for the purpose it has been granted for.

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