Startup India is a Government initiative which was officially launched on 16 January 2016. The motive behind the initiative was to encourage innovative startups to drive a sustainable economy and create massive employment opportunities for the younger generation. Under this, the Government launched several programs such as the I-MADE program and MUDRA Bank’s Scheme fostering Indian entrepreneurs. It also encouraged women entrepreneurs allotting Rs 1000 crore for women-led startups. It was on its 5th anniversary that the Prime Minister declared Rs 1000 crore towards ‘Startup India Seed Fund. Taking into account limitations of infrastructure and ecosystem services India required to delve on cost effective impactful solutions. Hence, there was a rise in angel investors and venture capitalists investing in startup companies.
All you need to know about Startup India Seed Fund Scheme
What is Seed Funding? How is it in India?
Seed funding terminology might have derived from the analogy of a plant seed. The concept behind the term is clear that seed indicates the beginning. The Initial stages are fragile and require constant strong support to flourish. It needs protection and securities to suffice the crisis. This can be applied to business growth too.
The strong foundation will eventually result in greater impact upon business. It is essential to accompany the first steps of the business journey. Time and money invested in the early phase of corporates may ultimately lead them into a promising future of business.
Hence, Seed funding initiative by the Indian Government has been implemented to lend financial support to sustain these startup companies. Whole intention is to enable firm grounding as the startup companies strive to establish one’s business idea in the business world. It does require strong investors to support this valuable journey.
The Central Government has devised desired financial support for startup companies. In this regard, the government approved the Startup India Seed Fund Scheme (SISFS) in January 2021 announced by Prime Minister Narendra Modi. This scheme will be officially operational on April 1st, 2021.
Following are the parameters for startup companies to be eligible for the SISFS scheme as per the notification given by the DPIIT (Department for Promotion of Industry and Internal Trade):
Eligibility Criteria for Rs 126 allocation due to SISFS
- Startup must be recognized by DPIIT and incorporated within 2 years while applying.
- Startup must have a solid business idea, and which has vast scope to develop.
- Emphasis must be on core product developments.
- First preference is given to sustainable development sectors such as Financial, social impact, natural resources management, education, agriculture, biotechnology, healthcare, defense, transport, etc.
- Startups must not possess more than 10 lakh monetary support from any other Government Schemes excluding prize money.
- Only once seed support will be processed.
Seed funding comes to entrepreneur’s table in the second stage of funding.
Every startup goes through a series of investment stages. At first when an aspiring entrepreneur is enlightened with a genius business idea sets to put it in action. This level does not cost much as it involves mere planning and required documentation. Here, finances are manageable with own pocket savings or money lent from friends and family without any interest or at a cheap rate.
After seeking advice from expertise and receiving green signals the next step is to make a proposal. At this stage, the entrepreneur researches and develops the product. Research about target audience, their demands and interests, about marketplace, competitors and other details. It incurs a little more expense where seed capital or seed money or seed funding takes its turn to support the ecosystem. Here both investors and entrepreneurs play a significant role.
“A Dream written down with a date becomes a Goal. A Goal broken down into steps becomes a plan. A Plan backed by action becomes reality.”
Inspired from the very words of Prime Minister Narendra Modi “We are trying to create a startup system which is based on the mantra ‘of the youth, by the youth, for the youth’.”
It speaks of Indian youth power which is the backbone of our economy. A new positive vibe is spread across the country now to burgeon startups with resourceful plans. The country is ready to embrace the incredible solutions intelligently premeditated by the young entrepreneurs. The future is in the hands of young India. The call is yours, step to dare, acquit your capabilities into realities. It’s just a matter of time, plan, befriend right investors and approach build funds.
Let us believe in the legacy of – Inspire youth and transform India!