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Startup India Seed Fund Scheme

  May 31, 2023

Startup India Seed Fund Scheme

Q What is meant by seed funding ? 

  • It typically represents the first official money that a business venture or enterprise raises.
  • It helps a company to finance its first steps, including things like market research and product development.
  • There are many potential investors in a seed funding situation: founders, friends, family, incubators, venture capital companies and more.
  • One of the most common types of investors participating in seed funding is a so-called "angel investor."
    • Angel investors tend to appreciate riskier ventures (such as startups with little by way of a proven track record so far) and expect an equity stake in the company in exchange for their investment.

Q What is Startup India Seed Fund Scheme (SISFS) ? 

  • Startup India Seed Fund Scheme (SISFS) 
    • Aim: To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry, and commercialization.
    • Launched by: Department for Promotion of Industry and Internal Trade (DPIIT) with an outlay of Rs. 945 Crore.
    • Some Eligibility Conditions:
      • A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application.
      • Startups should not have received more than Rs. 10 lakh of monetary support under any other Central or State Government scheme.
    • Expected Benefit:
      • It will help in creating a robust startup ecosystem in Tier 2 and 3 regions, as the smaller towns in India are often not provided with appropriate funding.


Q What are some key features of the scheme ? 

  • It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
  • An Experts Advisory Committee (EAC), constituted by DPIIT, will be responsible for the overall execution and monitoring of the Scheme.
  • Grants of upto Rs. 5 crore will be provided to the eligible incubators selected by the committee.
  • The selected incubators will provide grants of up to Rs. 20 lakh for validation of proof of concept, or prototype development, or product trials to startups.
  • Investments of up to Rs. 50 lakh will be provided to the startups for market entry, commercialization, or scaling up through convertible debentures or debt-linked instruments.


Q What is Startup India Initiative ? 

  • Startup India Initiative:


  • It envisages building a robust Startup ecosystem in the country for nurturing innovation and providing opportunities to budding entrepreneurs. It was launched in 2016.
  • The action plan of this initiative focuses on following three areas:
    • Simplification and Handholding.
    • Funding Support and Incentives.
    • Industry-Academia Partnership and Incubation.


Q What are some other related Initiatives of government ?

  • Related Government Initiatives:


  • Startup Innovation Challenges: It is a fantastic opportunity for any startup to leverage their networking and fund-raising efforts.
  • National Startup Awards: It seeks to recognize and reward outstanding startups and ecosystem enablers that are contributing to economic dynamism by spurring innovation and injecting competition.
  • Ranking of States on Support to Startup Ecosystems: It is an evolved evaluation tool aimed to strengthen the support of States and UTs to holistically build their startup ecosystems.
  • SCO Startup Forum: The first-ever Shanghai Cooperation Organisation (SCO) Startup Forum was launched in October 2020 to develop and improve startup ecosystems collectively.
  • Prarambh: The ‘Prarambh’ Summit aims to provide a platform to the startups and young minds from around the world to come with new ideas, innovation and invention.