In a country known for its entrepreneurial spirit, startups are the lifeblood of innovation and economic growth. However, many promising business ideas often need more capital in their early stages – the need for more money. The Department for Promotion of Industry and Internal Trade (DPIIT) introduced the Startup India Seed Fund Scheme (SISFS) to address this critical issue and foster a robust startup ecosystem. With an impressive outlay of INR 945 Crore, this scheme aims to provide financial assistance to startups for various stages of development, from proof of concept to commercialization.
Objectives of the Startup India Seed Fund Scheme
The primary goal of the SISFS is to address the capital inadequacy faced by startups during the seed and proof of concept development stage. It recognizes that many brilliant business ideas with the potential to transform industries and create employment opportunities often fail to take off due to the lack of early-stage funding. By offering seed funds to deserving startups, the scheme seeks to have a multiplier effect in validating business ideas and promoting sustainable growth in the startup ecosystem.
Supporting Entrepreneurs and Incubators
The Startup India Seed Fund Scheme will support 3,600 entrepreneurs through 300 incubators over the next four years. DPIIT has constituted an Experts Advisory Committee (EAC) responsible for the execution and monitoring of the scheme. The EAC comprises distinguished members with diverse expertise, ranging from financial advisers to industry leaders and experts from various government bodies.
Members of the Experts Advisory Committee (EAC):
- Shri H.K. Mittal (Chairman)
- Ms Arti Bhatnagar (Additional Secretary & Financial Adviser)
- Smt. Manmeet K Nanda (Joint Secretary, DPIIT – Convenor)
- Dr Alka Sharma (Advisor DBT)
- Dr Anita Gupta (Head, NEB, DST)
- Shri Akash Tripathi (CEO MyGov and Joint Secretary, MeitY – Ministry of Electronics and Information Technology)
- Dr Chintan Vaishnav (Mission Director, Atal Innovation Mission (AIM), NITI Aayog)
- Dr Neeru Bhooshan (Assistant Director General (IP &TM), ICAR, Department of Agricultural Research and Education)
- Shri Saji Gopinath (Professor, IIM Kozhikode)
- Shri Karthik Reddy (Chairperson, IVCA – Indian Private Equity & Venture Capital Association, Co-founder and Managing Partner, Blume Ventures)
- Smt. Padmaja Ruparel (Co-founder of IAN – Indian Angel Network & Founding Partner IAN Fund)
- Smt. Anjali Bansal (Founder, Avaana Capital)
- Smt. Sruthi Kannan (Head, Cisco Launchpad)
- Dr Apoorva Ranjan Sharma (Co-founder of Venture Catalysts & 9 Unicorns)
Eligibility Criteria for Startups and Incubators
Startups recognized by DPIIT and incorporated up to two years before applying. Additionally, they should have a compelling business idea with market fit, viable commercialization potential, and a scope for scaling. Technological innovation should be at the core of the startup‘s product, service, business model, or distribution methodology to solve the targeted problem.
Preference for startups working on innovative solutions in social impact, waste management, water management, financial inclusion, education, agriculture, biotechnology, healthcare, energy, defence, space, railways, oil and gas, textiles, and more.
Furthermore, to ensure fair distribution and encourage early-stage ventures, startups should not have received over INR 10 lakh monetary support from any other Central or State Government scheme.
One of the essential criteria for startups seeking seed support is that the Indian promoters should hold at least 51% of the startup‘s shareholding at the time of application, as per the Companies Act, 2013, and SEBI (ICDR) Regulations, 2018.
The Startup India Seed Fund Scheme is a significant step towards fostering innovation, supporting startups, and bolstering economic growth. By addressing the critical issue of early-stage funding, the scheme encourages budding entrepreneurs to bring their ideas to life, contributing to job creation and economic prosperity. With the support of the Experts Advisory Committee and the government’s commitment, the SISFS has the potential to transform the Indian startup ecosystem and position it as a global leader in innovation and technology-driven solutions. As we look to the future, we anticipate a surge of innovative startups making their mark and positively impacting society and the economy.
