F.A.Qs

The Seed Fund Scheme is a government initiative aimed at providing financial support to startups in their early stages of development.

The eligibility criteria for a startup to apply under the Startup India Seed
Fund Scheme shall be as follows:

  1. A startup, recognized by DPIIT, incorporated not more than 2 years ago at the time of application
  2. Startups registered in India and recognized under the Startup India initiative are eligible to apply for the Seed Fund Scheme.
  1. Up to Rs. 20 Lakhs as a grant for validation of Proof of Concept, prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to the development of prototypes, product testing, building a product ready for market launch, etc.
  2. Up to Rs. 50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments
  3. Seed fund shall strictly not be used by startups for the creation of any facilities and shall be utilized for the purpose it has been granted for

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Benefits

The Indian government extends grants and funding opportunities to innovative startups, facilitating their growth and the introduction of distinctive products or services. Essentially, a grant functions as a transfer payment, distinct from technical assistance or other financial support like loans, guarantees, interest rate subsidies, direct appropriations, or revenue sharing. Recipients are not expected to repay the funds but are obliged to utilize them for the specified purpose, typically contributing to a broader societal benefit.

In specific scenarios, there might be revenue-sharing arrangements with the government, especially in cases where a discovery leads to a profitable patent.

With more than 1,000 grant programs administered annually by twenty-six federal agencies, the government supports funding for the arts, sciences, and educational institutions. These grants play a crucial role in financing ideas and projects that provide public services, stimulate the economy, and contribute to recovery initiatives, agricultural projects, and innovative research across various fields.