Madhya Pradesh Startup Policy 2022: Investment-Linked Assistance

• DPIIT-recognised Madhya Pradesh revenue-stage startups seeking investment-linked incentives.

About this scheme

The Madhya Pradesh Startup Policy 2022 introduces an Investment-Linked Assistance program, administered by the Department of MSME, Government of Madhya Pradesh. This initiative is designed to bolster the startup ecosystem within the state by providing financial backing to promising ventures. The Department of MSME, recognizing the role of startups in driving innovation and economic development, supports micro, small, and medium enterprises (MSMEs) across the region. This policy aligns with Madhya Pradesh's economic development goals, aiming to position the state as a hub for startup innovation.

Under this policy, eligible startups can receive a government top-up amounting to 15% of the investment secured from a SEBI (Securities and Exchange Board of India) or RBI (Reserve Bank of India) recognized institutional investor or angel network. This direct financial assistance is capped at Rs. 15,00,000 per instance of funding, ensuring targeted support while encouraging private sector participation. The program is structured to provide backing across four distinct funding stages, offering a financial runway with a total potential support reaching up to Rs. 60,00,000, underscoring the state's commitment to long-term startup success.

The financial assistance provided through this investment top-up offers flexibility, allowing startups to utilize the augmented capital for general operational and growth-related expenses. This complements and amplifies the capital raised from private investors, enabling startups to allocate resources efficiently towards product development, market expansion, and talent acquisition. A key aspect of this policy is its inclusivity, particularly through an incentive for women-led startups. These enterprises receive an additional 20% bonus on top of the standard assistance for each funding instance. This provision is aimed at promoting, empowering, and integrating women entrepreneurs into Madhya Pradesh's startup ecosystem, fostering a more diverse and equitable entrepreneurial landscape.

Who can apply

• DPIIT Recognition: The applicant startup must hold valid recognition from the Department for Promotion of Industry and Internal Trade (DPIIT), Government of India. This ensures adherence to national startup definitions.
• Madhya Pradesh Registration and Operation: The startup must be officially registered and actively operating its core business activities within Madhya Pradesh. This requirement focuses on fostering local economic development and employment within the state.
• Secured Institutional Investment: The startup must have successfully secured and received investment from a SEBI or RBI-registered institutional investor. This includes Alternate Investment Funds (AIFs), Venture Capital (VC) firms, recognized angel networks, or other institutional investors officially recognized by these regulatory bodies. This criterion validates the startup's potential and market acceptance through third-party due diligence.
• Proof of Investment: Applicants are required to submit documentation, including a signed funding agreement with the institutional investor and verifiable proof of fund receipt. This proof can include a Foreign Inward Remittance Certificate (FIRC) if the investment originated from outside India, or bank transaction proofs demonstrating the successful transfer of funds.
• Women-Led Bonus Qualification: Startups aiming for the additional 20% bonus incentive must be majority women-owned, meaning women founders must collectively hold more than 50% equity in the company. This clause is designed to champion gender diversity in entrepreneurship and provide an impetus to businesses led by women.

Eligible entity types: Private Limited, LLP, Partnership

Benefits & funding

• Government top-up of 15% on institutional investments, capped at Rs.
• 15 Lakh per instance, up to Rs.
• Funds can be used for operational and growth expenses like product development, market expansion, and talent acquisition.
• Women-led startups receive an additional 20% bonus per funding instance.

How the application process works

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

1. 1

   Applications are submitted through the MP Startup portal with documentation verifying DPIIT recognition, investment receipt, and company incorporation details.

2. 2

   Applications are reviewed by the competent authority under the MP Startup Policy 2022.

3. 3

   Approved startups receive financial assistance linked to qualifying external investments received.

Documents checklist 4

• DPIIT Certificate
• Signed Investment Agreement
• Proof of Fund Receipt
• 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