Have an innovative business concept but require that much-needed capital to get it off the ground? Startup India Seed Fund Scheme (SISFS) is a potent government program, which is meant to be that spark. This scheme was started to empower the next generation of Indian innovators to get the financial support they need to go between concept and market.
When you are an aspiring entrepreneur seeking a grant, seed-funding or an investment to prototype your idea, test it or commercially launch it, this is the guide to all the information about this transformative scheme that you will need to know.
Overview: What is the Startup India Seed Fund Scheme?
Startup India Seed Fund Scheme (SISFS) is one of the flagship programs that was introduced by the Department of Promotion of Industry and Internal Trade (DPIIT) on 19 th April in 2021. It has a large corpus of 945 Crore, whose main intention is to offer essential funding to start-ups at their initial stage.
The plan is aimed at assisting start-ups to achieve the level where they can acquire additional investment either through angel investors or venture capitalists or borrowing through financial institutions. It pays out the funds to select startups via a network of suitable incubators throughout India.
Key Highlights & Features of SISFS
- Sector-Agnostic Support: Startups from all industries and sectors are welcome to apply.
- PAN-India Reach: A truly national programme, accessible to startups from every corner of the country.
- No Mandatory Physical Incubation: You do not necessarily need to be physically present at an incubator to receive funding.
- Apply to Multiple Incubators: You can apply to three incubators simultaneously, listing them in order of your preference.
- Year-Round Applications: There’s no deadline. Applications are accepted online all year round.
What Financial Benefits Can You Get?
The seed fund is disbursed to eligible startups in two key forms:
- Grant of up to ₹20 Lakhs
- Purpose: For validation of Proof of Concept (PoC), prototype development, or product trials.
- Disbursement: Funds are released in instalments based on achieving pre-defined milestones (e.g., completing a prototype, finishing product testing).
- Investment of up to ₹50 Lakhs
- Purpose: For market entry, commercialisation, or scaling up the business.
- Format: This is provided as investment via convertible debentures, debt, or debt-linked instruments.
- Terms: The interest rate will not exceed the prevailing repo rate. The loan tenure is a maximum of 60 months (5 years) with a possible moratorium (pause on repayments) of up to 12 months. This is unsecured, meaning no personal or third-party guarantees are required.
⚠️ Important: The seed fund cannot be used for creating capital assets like facilities or buildings. It must be strictly utilised for the approved purposes.
Are You Eligible? Check the Criteria
To qualify for the Startup India Seed Fund Scheme, your startup must meet the following conditions:
- Recognition: Must be a DPIIT-recognised startup.
- Age: Incorporated for not more than 2 years at the time of application.
- Business Idea: Must have a idea for a product or service with a clear market fit, viable commercialisation potential, and scope for scaling.
- Technology Core: Must use technology in its core product, service, business model, or distribution methodology.
- Previous Funding: Must not have received more than ₹10 lakhs in monetary support under any other Central or State Government scheme. (Note: Prize money from competitions, subsidised workspace, or access to facilities are not counted).
- Shareholding: Indian promoters must hold at least 51% of the shares at the time of application.
Preference is given to startups creating innovative solutions in sectors like social impact, waste management, agriculture, healthcare, education, energy, financial inclusion, and defence.
How to Apply for the Seed Fund Scheme: A Step-by-Step Guide
The entire application process is streamlined and completely online.
- Visit the Portal: Go to the official Startup India Seed Fund Scheme portal.
- Click ‘Apply Now’: On the homepage, click the ‘Apply Now’ button and select ‘Apply Now for Startups’.
- Log In: Use your existing credentials from your DPIIT startup recognition process to log in.
- Complete the Application: Fill in the required details in the application form. You will be able to:
- Select up to three incubators in your order of preference.
- Submit details on your team, problem statement, business model, market size, and a detailed plan for fund utilisation.
- Submit Documents: Upload the necessary documents digitally. No physical submission is needed.
- Track Your Application: You can track the status of your application in real-time through the portal.
There are absolutely no fees for applying or for any processes under this scheme.
What Happens After You Apply?
- Your application is evaluated by an Incubator Seed Management Committee (ISMC) at each incubator you applied to. This committee includes experts from venture capital, industry, academia, and successful entrepreneurs.
- The evaluation is based on your idea’s novelty, feasibility, market need, team strength, and fund utilisation plan.
- You may be shortlisted for an online presentation.
- incubators aim to complete their evaluation and selection within 45 days of receiving an application.
- You will be notified of the outcome via email, and if selected, the incubator at your highest preference that approves you will disburse the funds.
Essential Documents Checklist
Have these documents ready for a smooth application process:
- Certificate of Incorporation/Partnership Deed
- PAN Card of the Company
- GST Number
- Company Bank Account Details
- Authorisation Letter/Board Resolution for the applicant
- Financial Statements (if available)
- A short video pitch describing your product, service, or business model
Frequently Asked Questions (FAQs)
Q: What can I use the seed fund for?
A: Prototype development, product trials and proof-of-concept can be done with the grant. The investment can be applied in entry and commercialisation in the market. It can not be utilized in construction of facilities or infrastructure.
Q: Do I need to be physically incubated?
A: No. Physical incubation is not a mandatory requirement to receive funding under this scheme.
Q: My application was rejected. Can I apply again?
A: Yes. A rejection does not disqualify you. You can apply afresh with a strengthened proposal.
Q: How long does it take to receive the first instalment?
A: The initial instalment of a grant must be issued in 60 days after your full application to the incubator.
Q: What if my startup fails after receiving the funding?
A: The plan understands the fact that not every venture will work out. In case of failed projects, you will be asked to provide your detailed report on what you have learnt and the causes of the failure, as well as an audited utilisation certificate of the funds used. The liability of any kind is limited to this, since either it is a grant or an unsecured investment.
Q: Who reviews my application?
A: Each incubator that you submit your application to is reviewed by the Incubator Seed Management Committee (ISMC) that includes industry experts, investors, and government representatives.
Ready to Take the Next Step?
The Startup India Seed Fund Scheme is an awesome chance to receive non-dilutive grants and favourable investment to make your entrepreneurial dream come true. In case you are eligible, we urge you to get ready and submit your applications.
🔗 Apply Now: Startup India Seed Fund Scheme Portal