Introduction: The Department for Promotion of Industry and Internal Trade (DPIIT) has introduced a Seed Fund Scheme to provide financial assistance to early-stage startups in India. This article delves into the details of availing grants and loans under this scheme, highlighting eligibility criteria, the application process, and evaluation criteria.
Why such Scheme? There is an urgent need for some kind of financial support and mentorship in the initial stage of life cycle of startups. Some kind of financial handholding will go a long way for survival when the startups are trying to come out of the seedcoat. The Seed Fund Scheme is for eligible startups which have some business ideas. These ideas are directed to solve some social-economic problems with the use of technology.
Eligibility:
1. Only Incorporated entities are eligible for Startup India Seed Funds.
2. Entity must be recognized by DPIIT.
3. Startups can apply for Seed Funds within 2 years of their incorporation.
4. Startups must have a market-fit business idea with viable commercialization and scalability potential.
5. Startups must use technology in their core product, service, or business model to address the targeted problem.
6. Preference will be given to startups innovating in sectors like social impact, waste management, education, healthcare, energy, etc.
7. Startups shouldn’t have received over Rs 10 lakh support from Central or State Government schemes excluding prize money, 8. subsidized space, or access to facilities.
9. Startups must have at least 51% Indian shareholding.
10. Startup must not be prior receiver of seed fund.
11. Grant upto Rs. 20 lakhs is given for prototype development, product testing, and market launch preparation.
12. Loan upto Rs. 50 lakhs is given for market entry, commercialization, or scaling up using convertible debentures or debt instruments.
Keep these documents ready:
- Certificate of Incorporation
- DPIIT Recognition certificate
- Business PAN
- Registered office address
- GST number
- Adhaar card
- Bank account details
- Detail of products or services
- Employee details
- A video about your startup describing your product, service or business model
Process:
1. Visit https://seedfund.startupindia.gov.in/ and click “Login”.
2. Choose “Create an Account” at the bottom of the login tab.
3. Fill in details like name, email, mobile number, and password, then click “Register”.
4. Enter the OTP sent to your mobile and click “Submit”.
5. Return to https://seedfund.startupindia.gov.in/ and click “Apply Now”.
6. Select “Apply Now” for startups, log in with your credentials.
7. Fill out the application form, upload required documents, then click “Submit”.
Evaluation Criteria:
there is a body Expert Advisory Committee (EAC) having representation from government, industry and academia, which lay down guidelines. After submission of application and other details, Incubator Seed Management Committee (ISMC) evaluates and finally selects the startups for grant/loan.
Evaluation is be based considering following criteria, with weights given for each:
- Need: Is there a Need: Market size, gap addressed, real-world problem solving.
- Feasibility: Technical viability, validation method, development roadmap.
- Impact: Customer demographic influence, national significance.
- Novelty: Unique features, intellectual property.
- Team: Strength, expertise in tech and business.
- Fund Utilization: Clear plan for fund usage.
Way Forward: The application is forwarded by the preferred incubators in the specific domain of the applicant to the ISMC, which finally approve the grant/loan. The disbursal of grant or loan is done by the incubator thereafter. The grant is given on milestones basis. It takes approximately 60 days from application to disbursal. Every step is done online only and everything is fair and transparent.
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In case you have any concern and queries or need any support in DPIIT/ Startups/ Seed fund scheme, you may like to contact us.
Abhinarayan Mishra, FCA, FCS; KPAM & Associates, Chartered Accountants, Dwarka, New Delhi; +9910744992, [email protected]
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