Startup India Seed Fund Scheme -For every entrepreneur, the easy availability of capital is super important to grow their businesses. Many great business ideas don’t become real just because of lack of money. To help with this problem, the Government of India started something called the Startup India Seed Fund Scheme.
This scheme is all about giving financial help to entrepreneurs. In this article, we’re going to share all the details you need about the Startup India Seed Fund Scheme, including its benefits, goals, features, who can apply, what documents are needed, how to apply, and more.
Startup India Seed Fund Scheme 2024
To create a strong startup ecosystem, the Government of India started the Startup India Seed Fund Scheme on 16th January 2016. This scheme helps entrepreneurs grow their businesses. Our Prime Minister, Mr. Narendra Modi, announced this plan.
With the Startup India Seed Fund Scheme, startups can get financial help of up to Rs 50 lakh. This support is mainly for early-stage startups and they will receive this money through incubators.
The government has set aside a big budget of Rs 945 crore for this scheme. This fund will be used for many things. It will help with making new ideas, developing prototypes, trying out products, entering the market, and commercializing products.
Under this scheme, the government will give money to incubators. Then, these incubators will give funds to the startups. In the next four years, around 3600 entrepreneurs working with 300 incubators will benefit from the Startup India Seed Fund Scheme.
Highlights of Startup India Seed Fund Scheme
| Name Of The Scheme | Startup India Seed Fund Scheme |
| Launched By | Government Of India |
| Beneficiary | Entrepreneurs |
| Objective | To Provide Funds For Startup |
| Official Website | https://seedfund.startupindia.gov.in/ |
| Year | 2024 |
| Financial Assistance | Up To Rs 50 Lakh |
| Total Budget | Rs 945 Crore |
| Number Of Beneficiaries | 3600 |
Startup India Seed Fund Scheme Objective
The Startup India Seed Fund helps entrepreneurs get money for their startups. This is super important because it helps them grow their business. Before, entrepreneurs had to visit banks and financial institutions to find funds for their ideas. But now, thanks to this scheme, they can just apply directly and get money from the government.
The Startup India Seed Fund scheme is a great way to get the money they need at the right time. This money can be used for product development, testing, and even entering the market. When startups have the funds they need, they can make their ideas a reality and work better.
Also, this scheme is good for creating jobs. When startups grow, they can hire more people. So, not only does the Startup India Seed Fund help individuals, but it also helps the whole country by giving young entrepreneurs a chance to show their business ideas.
Benefits And Features Of the Startup India Seed Fund Scheme
- The Government of India has launched Startup India Seed Fund Scheme 2024 to build a Startup ecosystem
- This scheme was launched on 16 January 2016 to provide opportunities for entrepreneurs to grow their enterprise
- The announcement to launch this scheme was made by our honorable Prime Minister Mr. Narendra Modi
- Under this scheme Financial assistance up to Rs, 50 lakh will provide to startups at an early stage through incubators
- The government has allocated a budget of Rs 945 crore for this scheme
- This fund will.no used for proof of concept, prototype development, product trial, market entry, commercialization, etc
- The government is going to provide funds to incubators and the incubators will be responsible for providing these funds to startups
- 3600 entrepreneurs through 300 incubators will get benefit from this scheme in the next 4 years
Implementation Of Startup India Seed Fund Scheme
The Startup India seed fund scheme is super important for new businesses in India! The Department for the Promotion of Industry and Internal Trade has created a special group called the expert advisory committee (EAC) to help with this scheme. This committee will do many things to make sure the seed fund works well.
The EAC will check all the information given by the incubators. They will also choose the right incubators to receive the seed fund. This way, the best startups will get the help they need to grow.
Another important job of this committee is to keep an eye on how the incubators are doing. They will monitor the progress and make sure everything is going according to plan.
This expert advisory committee has the power to take all the actions needed. Their goal is to make sure the fund is used in the best way possible. With their guidance, the Startup India seed fund scheme can really help many young entrepreneurs shine! The expert advisory committee consists of the following members:-
- Chairman
- Representative of the department of biotechnology
- Additional secretary/joint secretary/director/deputy secretary, DPIIT
- Representative of the Department of science and technology
- Financial advisor, DPIIT
- Representative of the ministry of electronics and information technology
- Representatives of the Indian council of agricultural research
- At least three members nominated by the secretary
- Representative of NITI aayog
Monitoring Of Startup India Seed Fund Scheme
The expert advisory committee will check how well the startup India seed fund is doing with the chosen incubators. This seed fund is very important for new businesses. The incubators must give reports on their progress as told by the expert advisory committee. This helps everyone see how things are going.
If an incubator is not doing well according to the set standards, the expert advisory committee can stop the seed fund support. This means if they are not performing properly, they might lose financial help. It’s very serious because this seed fund is meant to help them grow.
Also, if any incubator is using the seed fund money for something else, then strict legal actions can be taken against them. This is to ensure that the money is used properly and helps new startups succeed.
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Factors Determining The Successful Implementation Of the Startup India Seed Fund Scheme
- Progress of market launch
- Quantum of loan
- Progress of field trial
- Jobs created by startup
- Progress of product development
- Turnover of startup
- Progress of prototype development
- Progress of proof of concept
Guidelines For Assistance To Incubators
- The expert advisory committee will be responsible for disbursing the grant to the incubators.
- The expert advisory committee will disburse the grant up to Rs 5 crore to the incubator in 3 or more installments
- The incubator can use the grant only for disbursing it to The eligible start-ups
- Expert Advisory Committee has the authority to decide the amount of grant assistance
- The incubator cannot use the grant for any other expenses
- 5% of seed fund grant will also be provided to the incubator for management fees
- The incubator is not authorized to use the management fees for any other expenses like facility creation or administrative expenses. This has to be used only for the management purpose
- The first installment of a grant provided to the incubator will be up to 40% of the total approved amount
- The next installment will be received by the incubator when the cash in hand goes below 10% of the total commitment
- The expert advisory committee will release the amount of the next installment within 30 days after the submission of proof
- From the date of receipt of the first installment, the assistance amount should be used by the incubator within three years
- If the incubator has not used 50% of the grant within 2 years then no further amount will be provided to the incubator and the incubator is required to return the unutilized fund with interest
- The startup selected under this scheme are not required to pay any kind of fees
- The incubator has to provide the physical infrastructure to the startup in order to maintain regular functioning, support, development, etc
- Incubator is also responsible for providing networking with investors
- The incubator has to maintain a transparent process of selection of startups
Selection Procedure Of Incubators
- All the incubators across the country will be invited to participate in the startup India seed funds scheme through the official portal or any other platform which will be specifically designed for this purpose
- The following points are to be considered while selecting the incubator
- Quantum of fund applied
- Deployment plan
- Number of startups that the incubator intends to support
- Mentoring provided in last 3 years (number of mentors hired, average mentoring hour, No of IP)
- Funding support extended in the last 3 years (investment agreement, number of startups, total Corpus, total investment)
- Incubation support in last 3 years (number of startups, success rate, number of startups that cross revenue of 1 crore in 1 year, survival rate of startup)
- Composition of ISMC
- Availability of infrastructure
- Quality of team
- Fulfillment of eligibility criteria
- Other support (industry connects, stakeholder engagement)
- Expert Advisory Committee has the authority to make changes in the guidelines of selection of incubators from time to time
- The expert advisory committee will also monitor the progress of the grant
- Incubators can apply under this scheme throughout the year
Selection Procedure Of Startups
- All the incubators who will apply under the startup India seed fund scheme are required to constitute a committee which will be called as incubator seed management committee. This committee will evaluate and select a startup for a seed fund. This committee consists of the following members:-
- Representatives from state government startup nodal team
- Nominee of the incubator(chairman)
- Representative of venture capital fund or Angel network
- Two successful entrepreneurs
- Domain expert from the academy
- Domain expert from industry
- Any other relevant stakeholder
- The expert advisory committee is responsible for selecting the members of the incubator seed management committee
- The open, transparent, and fair process should be followed while selecting the startup
- Startups have to submit certain details like team profile, problem statement, product overview, service overview, business model, etc
- Startups can apply for seed fund in any 3 incubators according to preference
- All the startups will be selected on the basis of eligibility criteria
- If an application is rejected then the applicant can apply afresh
- All the rejected applicants will be informed about the rejection through email
- Applicants can also track the progress of their application on the official portal
- The incubator will select the startup and provide seed funding
- While filling the application form the startup has to provide the preference and according to this preference the startup will be selected
- The startups are required to give a presentation of their idea before the incubator seed management committee and on the basis of this presentation incubator will shortlist applicants
- Within 45 days of receipt of the application, the incubator seed management committee will evaluate applicants on the basis of their submission and presentation and select eligible startups
Seed Fund Disbursement To Startups By Incubators
- All the eligible startups will receive the seed fund under the startup India seed fund scheme as follows:-
- Up to Rs 20 lakh as grant in the case for validation of proof of concept, prototype development or product trial
- Up to Rs 50 lakh of investment for market entry, commercialization, and scaling up through convertible debentures of debt or debt linked instruments
- The startup is not allowed to use this fund for the creation of any facility.
- In order to address the issues of the applicant, a grievance cell will be set up
- At the end of the project duration, the startup is required to submit a final report and audited utilization certificate of funds
- If the venture is failed then the entrepreneur is required to share his learnings and reasons for failure in the report. The report has to be submitted along with a utilization certificate of the fund amount
- The first installment to the startup will be provided within 60 days of receipt of the application form
- For receiving the first installment the startup has to submit the interim progress update and utilization certificate
- The startup will be provided the funds in their company bank account
- The second installment will be provided to the startup after achieving the previously specified milestone
- Before the release of the first installment, the incubator is required to execute a legal agreement with the startup in which all the necessary terms and conditions, milestones, etc should be mentioned
- The incubator can only provide 20% of the total grant received by them to the startups
Eligibility Criteria Of Startup India Seed Fund Scheme
For Startups:
- The startup should be recognized by DPIIT
- At the time of application, the startup should be incorporated not more than two years ago
- The started must have business ideas to develop a product or service which will be fit for the market, has the scope of scaling, and viable commercialization
- At the time of application to the incubator for the scheme, the shareholding by the Indian promoter in the startup should be at least 51% or more according to the companies act 2013 and SEBI regulation 2018
- The startup should have not received any support of rupees 10 lakh or more under any Central or government scheme
- Those startups who are creating an innovative solution in water management, waste management, education, agriculture food processing, etc will be given preference
- The startup should be using technology in its core product or service in order to solve the problem which is targeted
Required Documents To Apply For Startup India Seed Fund Scheme
- Aadhar card
- GST number
- Bank account details
- Lease agreement
- Detail report of the project
- Passport size photograph
- Mobile number
Procedure To Apply For Startup India Seed Fund Scheme
For Incubators
- First of all, go to the official websiteof the startup India seed fund scheme
- The home page will open before you
- On the homepage, you have to click on apply now
- After that, you have to click on apply now under for incubator section
- Now you have to click on create an account
- A new page will appear before you
- On this new page, you have to enter your name, email id, mobile number, and password
- After that, you have to click on the register
- An OTP will send to your registered ID
- You have to enter this OTP into the OTP box
- Now you have to click on submit
- After that, you have to click on the login option
- Now you have to select your country and click on the input letterbox
- Now you have to click on the next option
- The Application form will appear before you
- You have to enter your basic info, contact info, point of contact info, and success stories in this application form
- After that, you have to click on save profile
- Now you are profile will send to a moderator for approval
- You have to again login on to the portal
- Now you have to click on apply now under the seed fund scheme
- The Application form will appear before you
- You have to enter all the required details in this application form like general detail, incubator team detail, incubator support detail, fund requirement details, etc
- After that, you have to upload all the necessary documents
- Now you have to click on submit
- By following this procedure you can apply under the startup India seed funds scheme
For Startups
- Go to the official website of startup India seed fund scheme
- The home page will open before you
- On the homepage, you have to click on apply now
- After that, you have to click on apply now under the startup section
- After that application form will appear before you
- In this application form have to enter all the required details like your name, email address, mobile number, etc
- After that, you have to upload all the required documents
- Now you have to click on submit
- By following this procedure you can apply as a startup under the startup India seed fund scheme
Procedure To Login On The Portal
- Go to the official website of startup India seed fund scheme
- The home page will open before you
- Now you have to click on the login
- After that you have to choose your category which is are as follows:-
- Incubator/startup
- DPIIT/EAC
- Now you have to enter your username and password
- After that, you have to click on the login
- By following this procedure you can log in to the portal
Contact Us
- First of all, go to the official website of the startup India seed fund scheme
- The home page will open before you
- Now you have to click on the contact
- A new page will appear before you
- Enter the following details on this new page:-
- Entity type
- Name of the entity
- Name
- Email ID
- Location
- Query type
- Message
- After that you have to click on submit