The
Hon’ble Prime Minister, Shri. Narendra Modi introduced the Startup India Seed Fund Scheme (SISFS ) on
sixteenth January 2021. After the approval from the Hon’ble Finance Minister
and the Expenditure Finance Committee (EFC), the DPIIT notified this scheme on
21st January 2021.
The
investment from the challenge capital corporations and angel traders is to be
had to startups best after imparting their evidence of idea. Similarly, banks
provide loans to asset-subsidized startups. Thus, its miles important to offer
seed investment to the startups in India having a modern concept to behavior
evidence of idea trials.
The
SISFS gives seed investment to eligible startups thru incubators throughout
India for growing evidence of idea. It will help about 3, six hundred marketers
thru three hundred incubators with inside the subsequent 4 years, i.e.
2021-2025. The seed fund will permit the startups to be trying to find loans
from industrial banks or monetary establishments or improve investments from
angel traders or challenge capitalists.
Objectives of SISFS:
The
startup environment in India normally suffers from capital inadequacy with inside
the evidence of idea improvement level. The capital required via way of means
of the startups on the level of growing the evidence of idea regularly makes or
breaks a state of affairs for startups with exact enterprise thoughts.
Several
modern enterprise thoughts fail because of insufficient vital capital
necessities at an early level for prototype improvement, evidence of idea,
marketplace-access, product trials and commercialization. Seed investment to
such promising startups will have a multiplier impact for validating the enterprise
thoughts of startups, in the end main to employment generation.
Eligibility Criteria for SISFS:
The eligibility standards for a startup and incubator to use for the Startup India Seed Fund Scheme are noted below.
Eligibility Criteria for Startups under SISFS:
A
startup recognized via way of means of the DPIIT and included or registered now
no longer older than years on the time of submitting software. Startups
must have a enterprise concept to broaden a products or services with feasible commercialization,
marketplace match and scope of scaling. Startups
need to use generation of their middle service, product, distribution version,
enterprise version or technique to clear up the centered problem.
Preference
is given to startups inventing modern answers in sectors like waste management,
social impact, water management, education, monetary inclusion, meals
processing, agriculture, healthcare, biotechnology, mobility, energy, space, defense,
oil and gas, textiles, railways, etc.
Startups
which have obtained extra than Rs.10 lakh of economic help any Central or State
Government scheme aren't eligible beneath Neath this scheme. This quantity does
now no longer consist of subsidized running space; prize cash from competitions
and grand challenges get right of entry to labs, founder month-to-month
allowance or get right of entry to prototyping facility.
The
shareholding of an Indian promoter in a startup need to be at the least 51% on
the time of software to the incubator as in keeping with the Companies Act,
2013 and SEBI (ICDR) Regulations, 2018.
A
startup can reap seed help within side the shape of offers and convertible/debt
debentures, everyone in keeping with the scheme guidelines.
Eligibility Criteria for Incubators under SISFS:
The incubator
must be a felony entity, i.e. both of the subsequent entity:
- Society registered or included beneath Neath the
Societies Registration Act, 1860.
- Private Limited Company registered or included beneath Neath the relevant provisions of the Companies Act, 2013, or Companies
Act, 1956.
- Trust registered or included beneath Neath the
Indian Trusts Act, 1882.
- The statutory frame created thru an Act of the
legislature.
- Incubators need to be operational for at the least
years previous to the date of submitting the software.
- Incubators must have seating centers of at the
least 25 individuals.
- Incubators must have at the least 5 startups
present process incubation bodily previous to the date of submitting the
software.
- Incubators want to have a full-time Chief
Executive Officer, skilled in entrepreneurship and enterprise improvement and
supported via way of means of a group successful and chargeable for mentoring
startups in validating and testing, felony, finance, and human sources
functions.
- Incubators need to know no longer be disbursing
seed price range to incubate the use of investment from any 0.33-celebration
non-public entity.
- The Central or State Governments must have
assisted incubators.
- In case the Central or State Governments have
now no longer assisted the incubators, they need to fulfill the subsequent
situations to be eligible:
- Must be operational for no less than 3 years.
- Must have at the least ten separate startups present
process incubation bodily at the date of software.
- Must provide the audited annual reviews for the
final years.
- Any extra standards determined via way of means
of the Experts Advisory Committee (EAC).
- Application for Startup India Seed Fund Scheme
Application Procedure for Startups:
The software
system for availing the seed fund from the incubators via way of means of the
startups beneath Neath the SISFS are as follows:
- Go to the legit Startup India Seed Fund Scheme
internet site.
- Click at the ‘Login’ button at the pinnacle
right-hand facet of the homepage.
- The ‘Login’ tab will open. Click at the ‘Create
an Account’ alternative at the lowest of the tab.
- The registration web page of the ‘Startup
India’ internet site will open.
- Enter the name, e mail ID, cell number,
password, verify the password and click on at the ‘Register’ button.
- An OTP may be dispatched to the candidates’
registered cell numbers. Enter the OTP and click on at the ‘Submit’ button.
- Go to the page of Startup India Seed Fund
Scheme internet site and click on the ‘Apply Now button on the right side of
the home page.
- Select the ‘Apply Now’ button beneath Neath the
‘For Startups’ alternative and log in the use of the username and password
registered at the Startup India internet site.
- The software shape will open. Enter all of the
information at the software shape, add the files and click on at the ‘Submit’
button.
- Upon clicking at the ‘Submit’ button, the
software may be submitted for choice of the startup for seed investment beneath Neath the SISFS scheme.
Application Procedure for Incubators:
The software system
for incubators to use for the SISFS is as follows:
- Go to the official website of Startup India
Seed Fund Scheme.
- Click at the ‘Login’ button at the pinnacle
right-hand facet of the homepage.
- The ‘Login’ tab will open. Click at the ‘Create
an Account’ alternative at the lowest of the tab.
- The registration web page of the ‘Startup
India’ internet site will open.
- Enter the name, e mail ID, cell number,
password, verify the password and click on at the ‘Register’ button.
- An OTP may be dispatched to the applicant’s
registered cell number. Enter the OTP and click on at the ‘Submit’ button.
- Go to the Startup India Seed Fund Scheme
internet site and click on the ‘Apply Now’ button on the right side of the home
page.
- Select the ‘Apply Now’ button beneath Neath the
‘For Incubators’ alternative and log in the use of the username and password
registered at the Startup India internet site.
- Select the country, click on at the center
letterbox and click on at the ‘Next’ alternative.
- The software shape will open. Enter all of the
information with the software shape and click on at the ‘Save Profile’ button.
- The profile may be sent to a moderator for
approval. After approval, log in to the Startup India Seed Fund Scheme internet
site.
- Click on ‘Apply Now’ beneath Neath the seed fund
scheme.
- Enter the information in the software shape
consisting of widespread detail, incubator help detail, incubator group detail,
fund requirement information, etc.
- Upload the files and click on at the ‘Submit’
button.
- On clicking the ‘Submit’ button, the incubator
may have implemented for the SISFS.
Disbursement of Seed Fund via way of means of Incubators to Startups:
The incubator
will disburse the seed fund to an eligible startup as follows:
- Up to Rs.20 lakh as a provide for validation of
prototype improvement, evidence of idea or product trials. The incubator will
get rid of the grant in milestone-primarily based totally installments
associated with the improvement of a prototype, constructing a product equipped
for marketplace launch, product testing, etc.
- Up to Rs.50 lakh of funding for commercialization,
marketplace access or scaling up thru debt, convertible debentures or
debt-related instruments.
- The startups cannot use the seed fund for the
introduction of any centers and must utilize it for the motive it's been
granted.
- The incubator cannot provide extra than 20% of
its overall provide as offers to startups.
- The price range may be given to startups on the
fee of hobby now no longer extra than the triumphing repo fee for startups
supported thru debt, convertible debentures or debt-related instruments.
- The incubator must repair the tenure whilst
sanctioning the loan; however, it cannot be extra than 5 years. A moratorium of
as much as three hundred and sixty five days may be supplied for the startups.
- The loans sanctioned via way of means of the
incubator may be unsecured because of the early level of the startups. Thus,
the promoter or 0.33 celebration want now no longer provide any guarantee.
- The incubator will execute a felony settlement
with the eligible startups earlier than freeing the primary installment.
- Subsequent disbursements of the installments
may be related to the fulfillment of the formerly designated milestones as in
keeping with settlement among the incubator and startup.
- The startups will acquire the price range of
their enterprise financial institution accounts.
- The first installment to the eligible startup
may be launched inside 60 days from receipt of software from the startup.
- The eligible startup must post the utilization
certificates and intervening time developments replace to provoke the discharge
of next installment.
Implementation of SISFS:
The
DPIIT has constituted an Experts Advisory Committee (EAC) this is chargeable
for the tracking and execution of the SISFS. The EAC evaluates and selects the
incubators for dispensing seed price range, reveal development and adopt the
important measures for green utilization of price range closer to the fulfillment
of goals of the SISFS.
The EAC
evaluates the chosen incubators for provide help and gives a provider of as
much as Rs.5 crore to the chosen incubators in milestone-primarily based
totally 3 or extra installments. The EAC comes to a decision the precise installments
and quantum of offers for every incubator primarily based totally on its
assessment.
Every
incubator beneath Neath the SISFS will represent a committee called the
Incubator Seed Management Committee (ISMC), including professionals who can
pick out and compare startups for seed help. The incubators might also
additionally shortlist startup candidates primarily based totally on their
assessment for a presentation earlier than the ISMC.
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