The Startup India Seed Fund Scheme (SISFS) was launched by DPIIT on April 19, 2021, with a total outlay of ₹945 Crore. The objective is to provide financial assistance to startups via selected incubators for activities such as proof of concept, prototype development, product trials, market entry, and commercialization. The scheme ensures that startups grow to a level where they can raise institutional funding.
Objectives
• Promote innovation through financial support
• Support early-stage startups for commercialization
• Encourage a culture of entrepreneurship across India
• Bridge the gap between idea and investment
Benefits
• Grant of up to ₹5 Crore per selected incubator, released in 3+ milestone-based installments
• Additional 5% Management Fee included (for administrative & mentoring support)
• Funds must be utilized within 3 years of the first installment
• Startups supported free of cost under the scheme
• All disbursals to be made only to eligible startups for specific development purposes
Eligibility
For Incubators: • Must be a legal entity (Society, Trust, Company, or Statutory Body)
• Operational for at least 2 years at the time of application
• Must have minimum 25 seating capacity
• At least 5 startups physically incubated
• Must have a full-time CEO with a qualified support team
• Incubator should not use third-party funds for disbursing seed grants
• If not government-supported, then:
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Must be operational for at least 3 years
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Must physically incubate at least 10 startups
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Must provide audited annual reports for past 2 years
Application Process
Online • Visit Startup India Seed Fund Portal
• Register as an incubator and fill in the online application form
• Upload necessary documents and declarations
• Application is reviewed by Experts Advisory Committee (EAC)
• No fees required at any stage
• Reapplication allowed upon full disbursement of previously sanctioned funds
Selection Criteria for Incubators
• Fulfillment of eligibility norms
• Quality and experience of incubation team
• Infrastructure and available testing facilities
• Performance metrics of previously incubated startups
• Mentoring and funding support track record
• Network and corporate linkages
• Number of startups proposed to be supported
• Transparent fund management processes
Documents Required
• Proof of legal entity
• Proof of government assistance (if applicable)
• Incorporation certificate and PAN card
• Board resolution / Authority letter
• Audited financials (last 2 years)
• Pictures of facility
• Incubator pitch deck
• CEO and team CVs
• Agreement formats with startups
• Aadhaar of authorized signatory
• Self-declaration regarding eligibility
Frequently Asked Questions (FAQs)
Q: What is SISFS?
It is a government scheme to support startups financially through incubators for early-stage development and commercialization.
Q: How much fund can an incubator receive?
Up to ₹5 Crore in milestone-based installments.
Q: What is the purpose of Management Fee?
It covers costs of startup selection, monitoring, and administrative tasks—capped at 5% of grant.
Q: Can incubators charge startups any fee?
No, all support must be provided free of cost.
Q: What happens to unused funds?
They must be returned with interest if not used within timelines.
Q: Can an incubator reapply after one grant cycle?
Yes, if all prior grants are fully committed/disbursed.
Q: What is ISMC?
Incubator Seed Management Committee—responsible for approving startups for seed funding.
Q: How are funds disbursed?
First tranche may be up to 40%; next tranches released upon milestone achievements.
Q: What support do incubators offer beyond funding?
Mentorship, networking, access to labs/facilities, legal/financial advice, and showcasing opportunities.
Q: Are there sector restrictions?
No, the scheme is sector-agnostic.