INTRODUCTION

Seed funding or seed-stage funding is a very initial investment. Generally, investors often get an equity stake in exchange for the capital invested. In case the founders use their savings to start up a business, it is called bootstrapping. On the 16th of January 2016, the Government of India introduced the Start-up India Seed Fund Scheme in order to create possibilities for entrepreneurs to grow their businesses. Our esteemed Prime Minister, Mr. Narendra Modi, made the announcement to establish this scheme. Financial help of up to Rs 50 lakh would be provided to entrepreneurs at an early stage through incubators under this scheme. This scheme has a budget of Rs 945 crore set aside by the government. Proof of concept, prototype development, product trial, market entry, and commercialization will all be covered by this fund. The government will offer funding to incubators via this programme. The incubator will be in charge of constantly giving these funds to the company. 3600 entrepreneurs through 300 incubators will benefit from the start-up India seed fund scheme in the next 4 years. The government will award a grant to 300 incubators under the Start-up India Seed Fund Scheme 2022. This scheme would provide up to Rs 50 lakh in funding to the start-up. Through the official webpage, incubators can apply for funding under the Start-up India seed fund scheme. The government would provide them with a seed fund after confirming their application. Start ups can also apply for this plan directly through the portal, where they can choose from a list of incubators based on their preferences.

OBJECTIVE OF SISFS

The Start-up India Seed Fund’s major goal is to provide cash to entrepreneurs for their firms so that they can build their businesses. Entrepreneurs no longer need to resort to banks or financial organisations to receive cash for their business ideas thanks to this scheme. They can apply for cash directly from the government by using this scheme. The Start-up India seed fund concept will meet early funding needs at the right moment. So that product development, trials, market introduction, and other activities can occur at the appropriate time. This programme will also create a lot of jobs and validate start-up business concepts.

 FEATURES OF THIS SCHEME

• In the next four years, it expects to support 3,600 entrepreneurs through 300 incubators.

• DPIIT will appoint an Experts Advisory Committee (EAC) to oversee the Scheme’s overall implementation and monitoring.

• Grants of up to Rs.5 crore would be given to the committee’s chosen suitable incubators.

• Start-ups will receive subsidies of up to Rs.20 lakh from the selected incubators for validation of proof of concept, prototype development, or product trials.

• Start-ups will be given up to Rs.50 lakh in convertible debentures or debt-linked instruments to help them enter the market, commercialise their products, or scale up.

ELIGIBILITY CRITERIA OF SISFS

FOR START-UPS:

• DPIIT should recognise the start-up.

• The start-up must have been founded within the last two years at the time of application.

• The start-up must have business ideas in order to build a product or service that is marketable, scalable, and commercially sustainable.

• According to the businesses act of 2013 and SEBI regulation 2018, the Indian promoter’s equity in the company must be at least 51 percent or more at the time of application to the incubator for the scheme.

• No support of rupees ten lakh or more should have been given to the company under any Central or government scheme.
• Start-ups developing new solutions in areas such as water management, waste management, education, agriculture, food processing, and so on will be given priority.
• In order to solve the problem that is being targeted, the firm should include technology into its primary product or service.

FOR INCUBATORS:

• It is necessary for the incubator to be a legal entity.
• The central or state government must aid the incubator.
• At the time of application, the incubator must have been operating for at least two years.
• The incubator must be able to accommodate at least 25 people.
• At the time of application, the incubator should have at least 5 businesses undertaking physical incubation.
• In the incubator, a full-time chief executive officer with experience in business growth and entrepreneurship should be provided, as well as a skilled staff.
• The incubator is ineligible if it receives funds from a third-party private entity for the incubates.
• If the incubator is not supported by the central or state governments, it must have been in operation for at least ten years, have submitted audited yearly reports for at least two years, and have at least ten unique companies undertaking physical incubation at the time of application.

PROCEDURE TO APPLY FOR SISFS

FOR INCUBATORS:

• Go to the official website and the home page will be seen before you.
• The company will have to click apply now and under that choose incubators.
• The company then needs to create an account by providing basic details such as contact info, id proofs, company name, country, etc.
• Now after creating an account you have to apply for the seed fund scheme and by clicking on that your application form will appear.

• The company has to enter all the required details in this application form like general detail, incubator team detail, incubator support detail, fund requirement details, etc.

• Upload necessary documents and submit it and by this you can apply under SISFS.

FOR START-UPS:

• Go to the official website and the home page will be seen before you.
• The company will have to click apply now and under that choose start-up.

• After that application form will appear before you.
• In this application form have to enter all the required details like your name, email address, mobile number, etc.
• After that, you have to upload all the required documents.
• Now you have to click on submit.
• By following this procedure you can apply as a startup under the startup India seed fund scheme.

OTHER RELATED INITIATIVES BY GOVERNMENT FOR START-UP FUNDING

• Start-up Innovation Challenges: This is an excellent opportunity for any start-up to expand their network and raise funds.
• The National Start-up Awards: aims to recognise and reward excellent entrepreneurs and ecosystem enablers who are fostering innovation and introducing competition into the economy.
• SCO start-up forum: The first-ever Shanghai Cooperation Organisation (SCO) Start-up Forum was inaugurated in October 2020 with the goal of cooperatively developing and improving start-up ecosystems.
• The ‘Prarambh’ Summit intends to create a venue for start-ups and young minds from all over the world to come up with new ideas, innovations, and inventions.

CONCLUSION:

SISFS led by government of India is a great way for start-ups to get funds they need for their business development. Earlier there was no scheme for start-ups but as time moved and there was a wave of start-up companies coming up which had good ideas and models but no money to fund it, the government took the charge and is trying to fund as much start-ups it can.

REFERENCES:

• SISFS Seedfund.startupindia.gov.in, https://seedfund.startupindia.gov.in/.
• Startup India Seed Fund Scheme 2022: Apply Online, Eligibility & Benefits PM Modi Yojana, https://pmmodiyojana.in/startup-india-seed-fund-scheme/#Eligibility_Criteria_Of_Startup_India_Seed_Fund_Scheme.
• https://www.godigit.com/guides/government-schemes/startup-india-seed-fund-scheme-sisfs.