Creating a business or a big organisation is one of the hardest things to do in the world right now. Startup India Seed Fund Scheme launched by the Govt of India in 2016 helps the young and enthusiastic entrepreneurs to build a business. One can get seed funding through this scheme to kickstart their startup and ultimately create something that is both unique, new and useful to the society. This article covers everything you should know about the Startup India Seed Fund Scheme.
All About Startup India Seed Fund Scheme
The Government of India’s Startup India initiative aims to cultivate a strong startup ecosystem in the country, fostering innovation and offering opportunities to emerging entrepreneurs.
Ensuring easy access to capital is crucial for entrepreneurs in the initial stages of enterprise growth.
Traditional funding sources such as angel investors and venture capital firms typically become accessible to startups only after they demonstrate a proof of concept. Likewise, banks usually extend loans to applicants with tangible assets. Providing seed funding to startups with innovative concepts is vital for conducting proof of concept trials.
The Department for Promotion of Industry and Internal Trade (DPIIT) has established the Startup India Seed Fund Scheme (SISFS) with an allocation of INR 945 Crore to offer financial support to startups for Proof of Concept, prototype development, product trials, market entry, and commercialization. This initiative aims to assist approximately 3,600 entrepreneurs through 300 incubators over the next four years.
The Seed Fund will be allocated to eligible startups through accredited incubators nationwide.
The Indian startup ecosystem faces a shortage of capital during the seed and ‘Proof of Concept’ development phase.
During this critical stage, the capital needed often becomes a decisive factor for startups with promising business ideas—either making or breaking their potential success.
Numerous innovative business concepts struggle to launch because of the lacking essential capital crucial for early-stage activities such as proof of concept, prototype development, product trials, market entry, and commercialization.
Providing a Seed Fund to these promising cases can significantly amplify the validation of business ideas for many startups, ultimately contributing to employment generation.