The Startup India Seed Fund Scheme (SISFS) is a flagship government initiative with the aim of solving funding challenges faced by early-stage startups in India. It provides financial assistance to startups for crucial activities such as proof of concept, prototype development, product trials, market entry, and commercialization. By supporting startups in these initial stages, the scheme helps them progress to a level where they can attract investments from angel investors, venture capitalists, or secure loans from banks.
Types of Financial assistance
The SISFS provides financial assistance to startups in two ways:
Grant: Up to Rs. 20 lakhs for proof-of-concept validation, prototype development, or product trials, disbursed in milestone-based installments.
Investment: Up to Rs. 50 lakhs for market entry, commercialization, or scaling up, provided through convertible debentures, debt, or debt-linked instruments.
Recognition and Age: Startup must be DPIIT-recognized and incorporated within the last two years from the time of application.
Business Idea: Startup should have a scalable and commercially viable product or service with strong market fit.
Technology Use: Must integrate technology in core business areas, including products, services, business models, distribution, or problem-solving.
Sector Preference: Startups in these sectors are prioritized i.e. Social Impact, Waste/Water Management, Financial Inclusion, Education, Agriculture, Food Processing, Biotechnology, Healthcare, Energy, Mobility, Defense, Space, Railways, Oil and Gas, Textiles.
Prior Funding Cap: Startup should not have received over ₹10 lakh in funding from other government schemes (excludes prize money, subsidized spaces, allowances, lab/prototyping access).
Shareholding pattern: Indian promoters must hold at least 51% of the startup’s equity shares.
One-Time Support: A startup can only receive seed funding once under SISFS provisions.