The government has notified the Startup India Seed Fund Scheme (SISFS) with a corpus of Rs 945 crore. SISFS is a scheme aimed at providing financial assistance to startups for product trials, proof of concept, market-entry, prototype development, and commercialization.
Key Points
- As notified by the government, the funds under the Startup India Seed Fund Scheme will be disbursed via selected incubators across the country from 2021-25.
- The official notification regarding SISFS was released by the Department for Promotion of Industry and Internal Trade (DPIIT).
- DPIIT will also form an Experts Advisory Committee (EAC) to look after the overall execution and to monitor the Startup India Seed Fund Scheme.
- EAC will evaluate and select incubators for allotment of Seed Funds, take all required measures for efficient utilization of funds, and monitor progress.
- The funds under SISFS can be availed by a startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
- The startup must have a suitable commercially viable business idea and should use technology in its core product or service.
- As per the notification, preference would be given to startups creating innovative solutions in sectors like waste management, healthcare, social impact, agriculture, textiles, defence, water management, education, food processing, railways, energy, financial inclusion, space, mobility, biotechnology, oil, and gas, etc.
Eligibility Criteria for Startups and Incubators
As notified, eligible startups should not have received monetary support of more than Rs 10 lakh under any other central or state government scheme. However, it does not consider prize money from competitions, founder monthly allowance, subsidized working space, access to labs, or access to prototyping facility.
Also, a startup should have at least 51% shareholding by Indian promoters at the time of application to the incubator for the scheme, as per the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.
The seed support will only be provided once to any startup.
For incubators, as per the eligibility conditions, they must be legal entities, be operational for at least 2 years on the date of application to the scheme, have at least five startups undergoing incubation physically, and have facilities to seat at least 25 individuals. They must have a full-time CEO and a capable team.