STARTUP INDIA SEED FUND SCHEME (SISFS) OPERATIVE FROM 01ST JULY, 2021
AIM: The scheme aims to provide startups with financial assistance at their early stages such as proof of concept, prototyping, product trials, market entry and commercialization.
Eligibility: A startup, recognized by DPIIT(Department for Promotion of Industry and Internal Trade), incorporated not more than 2 years ago at the time of application.
Funding from incubators:
– Up to Rs 20 lakhs as grants for validation of Proof of Concept, prototype development, product trials to startups.
– Up to Rs 50 lakhs for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.
Startups has an option to apply to 3 different incubators according to their preference.
Time Limit: After the receipt of the application, each Incubator shall evaluate applicants based on their submissions and presentations and select startups for Seed Fund within 45 days.
Startups will receive the funds in their company bank accounts.
Benefits: -Easy availability of capital at the early stages of growth of an enterprise.
-Funding from angel investors and venture capital firms.
-Rate of Interest of not more than prevailing repo rate (4%)
-First installment shall be released within 60 days.
-The tenure shall be of 5 years with moratorium period of up to 12 months.
-Because of the early stage of the startups, this shall be unsecured and no guarantee from promoter or third-party will be required.
*Note: Only DPIIT recognized startups can apply for the SISFS.
DPIIT recognized startups means: a “Startup” –
1. If it’s incorporated as either Private Limited Company or Registered Partnership Firm or Limited Liability Partnership. A sole proprietorship or a public limited company is not eligible as startup
2. If it is up to 10 years from the date of its incorporation/ registration
3. If its turnover for any of the financial years has not exceeded INR 100 crore
4. If it is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation
5. Should not have been formed by splitting up or reconstruction of a business already in existence.
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