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What is SISF Program

The Startup India Seed Fund Scheme, launched by the Department for Promotion of Industry and Internal Trade (DPIIT) with an Rs. 945 Crore outlay, aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.

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 Criteria for Startups

  • A startup should be recognized by DPIIT and 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 the market fit, viable commercialization, and scope of scaling
  • A startup should be using technology in their core product, service, business
  • model, distribution model, methodology to solve the problem being targeted
  • A startup should not have received more than Rs. 10 lakh of monetary support under any other Government scheme. This does not include prize money from competitions and grand challenges, subsidized working space, founder monthly allowance, access to labs, or access to prototyping facility
  • Shareholding by Indian promoters in the startup should be at least 51%, as per the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018
  • Preference will be provided to startups creating innovative solutions in the following sectors:
    • Medtech
    • IOT and Robotics
    • Defense and space
    • Biotechnology
    • Energy and mobility
    • Automobile Automation

Guidelines for Disbursement of Seed Fund to Startups by Incubators

A- Seed Fund to an eligible startup by the incubator shall be disbursed as follows:

  • Up to Rs. 20 Lakhs as grant for validation of Proof of Concept, or prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to development of prototype, product testing, building a product ready for market launch, etc.
  • Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments 3. 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

Duration

The period of prototyping support is only for 12  months.

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