In a world of possibilities, everyone wants to explore their passion for entrepreneurship. But not everyone could go for it. It may be because of not having a proper plan, but the major reason is always the funding. But to fire the fuel of innovations, the government of India has launched an incredible initiative. It’s the Startup India Seed Fund Scheme.
Startup India initiative aims to not let your dream of entrepreneurship fade away. But to fulfil it with high confidence. Government funding for startups helps to do the same.
Now let’s understand deeply about this scheme and its benefits.
What is a Seed Fund Scheme?
The seed fund scheme is an initiative which was introduced by our Prime Minister Shri Narendra Modi, on 16th January, 2016. It was launched to promote entrepreneurship in India. This scheme helps the startup ecosystem to scale their operations, and develop their business strategies.
Seed capital is basically the fixed sum of money which is given by the government at the early stage startups. The vision is to stand out as a hope and support at the initial phase of Indian startups. The belief in starting a new business gets a lot stronger with the introduction of this scheme.
What are the Benefits of Seed Fund Scheme?
The startup India initiative acts as a seed of growth and innovation. There are several benefits, but let me outline some key advantages of the seed capital.
Financial Support: The most important advantage of the scheme is the financial support. Indian startups can receive funding opportunities up to INR 50 lakhs. These funds will help them to cover the costs of product development, marketing, and major expenses.
Innovation: The scheme is all about innovations in the startup ecosystem. This support will help Indian startups take their business idea to higher levels.
Access to network: Startups under this scheme also get access to networking opportunities. It includes mentorship support and access to industry experts. This becomes very beneficial for the startups to grow.
Encourages Entrepreneurship: The Startup India Seed Fund Scheme encourages entrepreneurship in India with government support. Their vision is to reduce the financial burden and help startups reach higher levels.
Job Creation: Startups are built with the motive of market growth and employment generation. By supporting these startups, the government can actually create more jobs for the youth. This will be significant in economic growth as well.
Angel investors or venture capital firms give funding to startups who have proven their concept in the market. Banks provide funds or debts to asset based businesses. However, some firms lack the availability of both of these. So, to fill this gap government funding for startups has been launched.
What are the Eligibility Criteria for the Seed Fund Scheme?
- Your startup should be certified by the Department of Industrial Policy and Promotion (DIPP). It is done based on scalability and potential for employment creation.
- Availability of commercially viable and a scalable business plan. The startup must have an innovative business idea to resolve a serious problem in a way.
- Use of technology in the core products and services in your business.
- Priority will be given to startups working on unique solutions in sectors such as agriculture, food processing, biotech, water management, etc.
- 51% Ownership of the startup should be with Indian promoters. At least one woman has to be the cofounder.
How much Seed Funding can a Startup Receive Under a Seed Fund Scheme?
After fulfilling all the eligibility criteria, a startup can receive seed funds in two different forms:
- Grants
- Debts
Grants are given up to Rs 20 lakhs. It is a non-refundable fund, but it is given in instalments. The funding will be given as you reach the milestones of product testing, commercial vibal, prototype development, etc. Your progress and achievements will also be monitored timely.
Whereas, debts are given up to Rs 50 lakhs. It is returnable funds but is given in one shot. This debt is given to the startups, who are now out of their initial stage and ready for wide market entry. It is mainly used for commercialization and scaling up the business. One of the benefits of this debt is that the interest rate doesn’t increase more than the RBI’s repo rate.
What is the Application Process for Startup India Seed Fund Scheme?
Eligibility Check: If you fulfil all the above requirements, you become eligible to apply for the scheme.
Registration: Visit the official website of Startup India and register your startup.
Application: Once the registration is done, you can fill out the application form for the Startup India Seed Fund Scheme. The form will require basic information about your startup, like your business model, revenue model, target market, and growth potential.
Evaluation: After the application form is submitted, it will be evaluated by the legal experts. They will check if your startup fulfills the required objectives of the Startup India Seed Fund Scheme once they verify the uniqueness of your business idea, market potential, and team strength. If they get satisfied, the government will notify you to submit the necessary documents to initiate the funding agreement.
Distribution: The seed capital will be distributed to you once the legal formalities are done. Utilize the funds effectively for the development of your business. Make sure to use it in accordance with the terms and conditions.
Conclusion
Startup ecosystem is a way to create more job opportunities, innovations, and overall economic growth. This scheme is very beneficial, which automatically motivates the youth to aspire to their dream. You can contact JustStart if you want to apply for the scheme. We are here to guide you at every step.
