Bihar Startup Policy 2022: Success Fee Scheme

• DPIIT-recognised revenue-stage Bihar startups seeking a success fee grant.

About this scheme

The Bihar Startup Policy 2022, overseen by the Department of Industries, Government of Bihar, introduces the 'Success Fee Scheme' to empower early-stage startups within the state. This comprehensive policy aims to cultivate a thriving entrepreneurial ecosystem, stimulate innovation, and deliver diverse incentives for nascent ventures throughout Bihar, reflecting the government's steadfast commitment to supporting local startups from their foundational stages and positioning the state as a hub for innovation and growth.

This distinctive scheme offers a financial incentive equal to 2% of the total investment a startup successfully mobilizes from external sources. To qualify, these investments must originate from angel investors or recognized institutional investors, specifically those approved by SEBI or RBI. The primary objective of this fee is to alleviate the financial burden associated with securing external capital by defraying various costs incurred during the fundraising process. Securing external investment often comes with significant transactional costs that can strain an early-stage startup's finances. This scheme directly addresses this challenge by reimbursing a portion of these essential expenditures, thereby encouraging startups to pursue external capital without undue financial burden. It acts as a financial reward for successful fundraising, recognizing the effort and resources invested in attracting external capital.

Eligible expenses for which this success fee provides relief include essential legal fees, necessary due-diligence charges, financial advisory fees, valuation charges, and other transaction-related expenditures inherent in investment rounds. By covering a portion of these significant costs, the scheme directly supports the startup's financial health and operational continuity as it achieves critical funding milestones and scales its operations.

This initiative is a core component of the broader Bihar Startup Policy 2022, which collectively endeavors to create a comprehensive and supportive framework for entrepreneurial development across the state. It aims to reduce barriers to capital access and incentivize further investment into the region's startup landscape. The Department of Industries, Government of Bihar, is the nodal agency responsible for industrial development and promoting entrepreneurship in the state. Its mandate includes formulating and implementing policies that attract investment, generate employment, and foster a robust business environment.

Who can apply

• The startup must be an early-stage certified entity under the Bihar Startup Policy.
• The startup must be registered in Bihar.
• The startup must have successfully secured funding from angel investors or institutional investors recognized by SEBI or RBI.
• Proof of a signed funding agreement and actual receipt of funds is required.

Benefits & funding

• A financial incentive of 2% of external investment secured from approved angel or institutional investors.
• This defrays fundraising costs including legal, due-diligence, financial advisory, and valuation charges, supporting the startup's financial health during funding milestones.

How the application process works

The journey below is informational, compiled from the official program guidelines. Applications are submitted directly with Department of Industries, Government of Bihar, in your own name.

1. 1

   Applications submitted online are thoroughly verified by the Department of Industries for compliance with policy guidelines and eligibility.

2. 2

   Upon successful verification and approval, the fee is disbursed to the startup's account.

Documents checklist 4

• Signed Investment Agreement
• FIRC/Proof of Fund Receipt
• DPIIT Certificate
• Bank Details

Need help getting these in order? IncorpX provides assistance for incorporation, DPIIT recognition, MSME and GST registrations along with document preparation.

Frequently asked questions