The Government of India’s Startup India initiative aims to cultivate a thriving startup ecosystem, fostering innovation and opportunities for emerging entrepreneurs. Unveiled on January 16, 2016, by the Hon’ble Prime Minister, the Action Plan outlines 19 points to create a favorable environment for startups. The Startup India Seed Fund Scheme (SISFS) is a pivotal initiative offering financial aid to early-stage startups.
What is the Startup India Seed Fund Scheme?
Capital availability is critical for entrepreneurs in the early stages of enterprise growth. Traditional funding sources like angel investors and venture capital firms typically come in after proof of concept. Banks often require asset-backed applicants for loans. Recognizing the need for seed funding at the idea stage, DPIIT introduced the SISFS with an INR 945 Crore allocation.
This scheme supports startups in conducting proof of concept trials, prototype development, product trials, market entry, and commercialization. Over the next four years, it aims to assist around 3,600 entrepreneurs through 300 incubators.
The Hon’ble Prime Minister announced the scheme during the Grand Plenary address of Prarambh: Startup India International Summit on January 16, 2021. After approval from the EFC and Hon’ble Finance Minister, the scheme was officially notified on January 21, 2021. The Seed Fund will be disbursed through eligible incubators across India.