Early-stage startups often struggle not because of lack of ideas, but due to lack of seed capital. To bridge this gap, the Government of India launched the Startup India Seed Fund Scheme (SISFS)—a powerful initiative to support startups in their ideation, validation, prototyping, and early market entry stages.
Under SISFS, eligible startups can receive up to ?20 lakh as financial assistance without heavy collateral or traditional funding pressure.
The Startup India Seed Fund Scheme (SISFS) is a Government of India initiative launched in April 2021 to provide financial assistance to early-stage startups through approved incubators across India.
The objective is to:
Support startups at idea & proof-of-concept stage
Reduce dependency on personal savings
Enable commercialization of innovative ideas
Promote entrepreneurship in Tier-2 & Tier-3 cities
Startups can receive funding in two forms:
Used for:
Proof of Concept (PoC)
Prototype development
Product trials
Market validation
Used for:
Market entry
Commercialization
Scaling operations
Note: Grant and debt are disbursed via approved incubators, not directly by the government.
Encourage innovation and entrepreneurship
Provide seed funding at the most critical stage
Support startups in high-risk early phases
Create a strong startup ecosystem nationwide
Promote job creation and economic growth
Government-backed funding
No collateral required for grant
Focus on idea & innovation, not revenue
Mentorship & incubation support
Suitable for first-time founders
Helps attract future VC/Angel funding
| Merits (Advantages) | Demerits (Limitations) |
|---|---|
| Grant up to ?20 lakh | Highly competitive selection |
| No collateral for grant | Limited funding amount |
| Focus on early-stage startups | Long approval timeline |
| Government-backed credibility | Fund disbursed in tranches |
| Mentorship via incubators | Incubator dependency |
| Helps in prototype & PoC | Not suitable for late-stage startups |
To apply for SISFS, a startup must:
Be recognized by DPIIT
Be incorporated not more than 2 years before application
Have a viable business idea with innovation
Not have received more than ?10 lakh funding from any other government scheme
Use technology in product/service/business model
Be incorporated as:
Private Limited Company
LLP
Registered Partnership Firm
Must be legally registered
Minimum 2 years of operation
At least 25 incubated startups
Adequate infrastructure & mentoring capacity
Experience in supporting startups
Certificate of Incorporation
DPIIT Startup Recognition Certificate
Founder KYC (Aadhaar, PAN)
Pitch Deck / Business Plan
Problem–Solution Description
Financial Projections (if available)
Bank Account Details
Shareholding Pattern
Selection Committee evaluation
Recommendation letter
Fund utilization plan
1? Register on Startup India Portal
2? Get DPIIT Recognition
3? Apply for SISFS through selected incubator
4? Submit pitch & business details
5? Presentation before Incubator Selection Committee
6? Approval & tranche-based fund disbursement
Idea-stage startups
First-time entrepreneurs
Tech-driven business models
Startups in AI, FinTech, AgriTech, HealthTech, EdTech
Founders without angel/VC access
SISFS is a government scheme providing seed funding to early-stage startups through incubators.
Up to ?20 lakh as grant and ?50 lakh as debt/convertible debenture.
Grant is non-repayable; debt/convertible instruments are repayable or convertible.
No. Even idea-stage startups can apply.
No collateral is required for grant funding.
No. Applications are routed through approved incubators.
Typically 2–4 months, depending on incubator process.
Yes, startups may apply to more than one incubator.
Yes, provided the startup uses innovation & technology.
Yes, LLPs recognized by DPIIT are eligible.
CA Vikas Jain - Our Mentor
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