What is the Start-Up India Seed Fund Scheme for Incubators?

The multi-crore SISFS government fund is set to grow the Indian start-up ecosystem, and start-up incubators will tremendously benefit from this scheme.

The Start-Up India Seed Fund Scheme (SISFS) is an initiative by the Government of India to spur entrepreneurship across India via an extensive network of home-bred start-ups. With the devastation that the COVID-19 pandemic continues to cause, the need for Start-up India Seed Fund Scheme is more important today than ever.

India’s entrepreneurial community is formed by a large mix of MSMEs, emerging tech-driven businesses that are easing the traditional ways of doing companies and catalysts for start-ups that guide and aid entrepreneurs – the start-up incubators.


SISFS aims to promote the availability of capital necessary for the early stages of organisational development to emerging start-ups.

Angel investors and venture capital firms usually aid businesses with much clout and marketing already behind their ideas. Funding from them becomes available to start-ups only after the proof of concept has been provided. Likewise, banks only offer loans to applicants based on an experimented business idea. 

Today, however, it’s essential to provide capital to start-ups for testing their innovative ideas in the first place. The SISFS incubation fund guarantees this objective.

Eligibility parameters for start-up incubators to apply for the Start-Up India Seed Fund Scheme (SISFS).

# 1: Start-Up India Seed Fund Scheme Legal Validity for Incubators

The SFISFS candidate incubators must be a recognised legal entity based on the following criteria:

It must be a society under the Societies Registration Act 1860, or,  

It must be a trust organised under the Indian Trust Act 1882, or, 

It must be a Limited Liability Company under the Companies Act of 1956 or Companies Act of 2013, or, 

It must be a legal institution established under constitutional law by legislators.

# 2: Operational Eligibility for a Seed Fund Scheme Incubator 

The incubator must have been running for at least two years on the date of application for SISFS.

The incubator must employ at least 25 people, and it must be aiding at least five start-ups at the time of application.

# 3: Organisational Structure Eligibility for an Incubator

The incubator must have a defined organisational structure. It must have key personnel like a CEO, business development team, audit team, and competent financial, legal, and human resources team. 

Incubators are not allowed to use funds from private outsourced companies to provide capital to start-ups.

# 4: Qualifications Based on Prior Funding or Assistance 

To avail benefits of SISFS, a start-up incubator needs to have been supported by either the central government or state government. If it has not gotten the aid from central or state government previously, then the incubator:

Must have been in service for at least three years,

Must have at least ten independent promoters at the time of application,

Must have submitted the annual validation report for the last two years.

The Expert Advisory Committee may establish any other eligibility standard for availing SISFS benefits.

Seed Fund Scheme Expert Advisory Committee

The Ministry of Commerce and Industry-led Department for Promotion of Industry and Internal Trade (DPIIT) is designated to form an expert panel called the Expert Advisory Committee (EAC). This panel will be responsible for the overall implementation and oversight of the Start-Up India Seed Fund Scheme.

Due to a lack of sufficient resources, various innovative business concepts lag in prototype development, product testing, market access and market testing. SISFS will give the promising cases a chance to validate business ideas and a shot at success.

Aakash Sharma
Aakash Sharma
Aakash writes on Startup Ecosystem, Policies, Legal and Regulatory aspects of business planning. An alumnus of Delhi University, he is assistant editor at Dutch Uncles.



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