Startup India Seed Fund Scheme (SISFS) For Startups

• DPIIT-recognised Indian startups under 2 years old at idea or MVP stage.

About this scheme

The Startup India Seed Fund Scheme (SISFS) is a Government of India program launched by DPIIT in April 2021 with a total corpus of Rs. 945 crore. It provides seed-stage financial support to early-stage startups that have a validated idea or early prototype but cannot yet attract angel or venture capital investment.

The scheme targets approximately 3,600 startups through a network of around 300 DPIIT-approved incubators across India. As of December 2024, over 2,600 startups have received Rs. 467.75 crore in support, and more than 1,200 women-led startups have been funded.

How Does SISFS Work?

Funds are not disbursed directly by the government. DPIIT allocates capital to approved incubators, which then evaluate applications and release funds to selected startups. An Experts Advisory Committee (EAC) oversees incubator selection and scheme implementation.

Each incubator constitutes an Incubator Seed Management Committee (ISMC), comprising domain experts, VC and angel investor representatives, state government nominees, and experienced entrepreneurs, to evaluate and select startups for funding.

How Much Funding Can a Startup Get?

| Support Type | Amount | Purpose |
|---|---|---|
| Grant | Up to Rs. 20 lakh | Proof of concept, prototype development, product trials |
| Debt / Convertible Debentures | Up to Rs. 50 lakh | Market entry, commercialization, scaling |

Grant funds are released in milestone-based tranches. Debt instruments carry interest at no more than the prevailing RBI repo rate, a tenure of up to 5 years, and a moratorium of up to 12 months. Loans are unsecured, no collateral or personal guarantee required. Funds go directly to the startup's bank account.

A startup can avail both the grant and the debt support, once each, under the scheme.

Who Should Apply?

SISFS is for tech-driven startups at idea or MVP stage that are DPIIT-recognized and less than 2 years old at the time of application. The scheme is sector-agnostic, but incubators give preference to startups in healthcare, agriculture, biotech, social impact, clean energy, waste management, water management, financial inclusion, education, mobility, defense, and space.

Documents Required

DPIIT recognition certificate
Certificate of incorporation
PAN card and Aadhaar of founders
Shareholding pattern / cap table showing >=51% Indian promoter holding
Business plan or pitch deck
Prototype details or proof of concept documentation
Financial projections and fund utilization plan
Bank account details (cancelled cheque or statement)

Frequently Asked Questions

Can individual entrepreneurs apply for SISFS?

No. Only DPIIT-recognized entities incorporated as Private Limited Companies, LLPs, or Registered Partnerships are eligible. Sole proprietors and individuals cannot apply.

How many incubators can I apply to?

You can apply to up to 3 participating incubators simultaneously. If more than one selects you, funding comes from your highest-preference incubator that selects you.

Is DPIIT recognition mandatory?

Yes. Your startup must be recognized under Startup India before applying. You can get recognition at startupindia.gov.in.

Is there any application fee?

No. Zero fees at every stage, application, selection, disbursement, and monitoring. Incubators are prohibited from charging any fees to applicants or beneficiaries.

What if my startup has already received government funding?

You are ineligible if you have received more than Rs. 10 lakh in monetary support from any Central or State Government scheme. Prize money, subsidized workspace, lab access, and monthly founder allowances are excluded from this limit.

How long does selection take?

The ISMC selects startups within 45 days of receiving the application.

Can I reapply after a rejection?

Yes. You can reapply after 3 months from the date of rejection.

What can the funds not be used for?

Seed funds cannot be used to create physical facilities or infrastructure. They must be used strictly for the purpose stated in the agreement, R&D, product development, trials, or market entry.

What happens if the startup fails?

The entrepreneur submits a report covering learnings and reasons for failure, along with an audited utilization certificate. Loans are unsecured, so no personal liability applies beyond the incubator agreement terms.

Who can apply

• Must be recognized by DPIIT under the Startup India initiative
• Incorporated not more than 2 years before the date of application
• Must have a business idea with clear market fit, viable commercialization potential, and scope for scaling
• Technology must be a core component of the product, service, business model, distribution model, or methodology
• Must not have received more than Rs. 10 lakh in monetary support from any Central or State Government scheme (prize money, subsidized workspace, lab access, and founder stipends are excluded)
• At least 51% shareholding must be held by Indian promoters at time of application
• Must be incorporated as a Private Limited Company, LLP, or Registered Partnership , sole proprietors and individual applicants are not eligible
• Each startup can avail grant support and debt/convertible debenture support once each

Eligible entity types: LLP, Partnership, Private Limited

Benefits & funding

• Provides a seed grant of up to Rs.
• 20 lakh for proof of concept/prototype development and unsecured debt/convertible debentures of up to Rs.
• 50 lakh for market entry/scaling.
• Funds are milestone-based, with unsecured loans (no collateral/guarantee) at low interest, up to 5-year tenure, and 12-month moratorium.
• No application fees are charged at any stage.

How the application process works

The journey below is informational, compiled from the official program guidelines. Applications are submitted directly with Department for Promotion of Industry and Internal Trade (DPIIT), in your own name.

1. 1

   Applications are submitted to preferred incubators for eligibility checks and shortlisting.

2. 2

   The Incubator Seed Management Committee (ISMC) evaluates shortlisted startups.

3. 3

   A pitch or presentation before the ISMC may be required.

4. 4

   Final selection is communicated within 45 days.

Frequently asked questions