SISFS: Startup India Backed Seed Fund Scheme Explained

What is SISFS? For most Startup Founders, raising capital/funds/debts is a never ending battle. Just waiting out for the day when everything takes a turn and the business becomes self-sufficient.

From applying to countless incubators online, going on in to walk-in pitches, we do it all for the hope to fight another day. I’m also quite sure we’ve all heard that government schemes and the red tape go hand in hand.

And I can assure you that we’ve all received calls from middle-men who can guarantee disbursal of government funds through the Startup India scheme for a fee. Upfront of course 🙂

Frustrated with the process, I decided to spend a couple of days reading on how to go about the process for real. Without red tape, just plain blunt patience.

The following is my understanding about applying for SISFS (Startup India Seed Fund Scheme). If there are any errors, they are due to plain oversight or some other methods folks may have found.

Step 1: Having a Pvt. Ltd Company

For any fund-raise in general, your entity needs to be registered as a Pvt Ltd Company.

Since we’d already established ours as one when applying for SISFS, I never had to go and check what the steps were, if we were registered as an LLP, Partnership, OPC, etc.

Most likely, you would be asked to register yourself as a Pvt Ltd Company.

Step 2: Three websites to be registered on

• Startup India
• MSME
• SISFS (Startup India Seed Fund Scheme)

a) Startup India:

After registering yourself on the website, the next process would be to apply for the DPIIT certificate. This is essential as this certificate would officially recognize your company as a startup.

You will be asked to submit documentation, such as your GST, MSME (from step B), a Pitch Deck and the founder’s credentials. If all goes well, you should have the Certificate emailed to you in about 10 days time.

You can also apply for a BHASKAR ID, which is a new networking platform on the website. (This is still in development as of Dec 2024)

b) MSME:

Get your self registered as an MSME on the Udyog Aadhar website. I’m still yet to ascertain the value of this in practice. But it’s an additional check on your documentation.

Note: The certificate is issued generally immediately.

c) SISFS: The Startup India Seed Fund Scheme:

Document Checklist:

1. Company Documents

GST, COI, DPIIIT Certificate, MSME

2. Pitch Deck

A comprehensive deck that explains your idea in detail. Should be about 10-14 slides.

Tip: Do not half-ass this.

3. A General Summarization of Your Idea

If you cannot explain your idea in layman’s terms or visualize your idea in a way that can be understood to most people, then this scheme is not for you. And perhaps your idea may also be too convoluted.

Tip: Simplify. This is the essence of any idea. Simplify it so that people can understand.

If they do not understand your pitch, then no-matter how well it is presented on justified, it simply will not work.

The Seed Fund scheme is designed to provide funds for the Idea or Early Stage ventures. The fund starts from ₹25L and goes up to possibly ₹1Cr (per application).

After filling out the form, the questionnaire (which is intensive) and uploading all the documents, you will be asked for how much funds you require and the splits on where it would be spent: Marketing, Capex, Talent, etc.

Incubators

You will now be sent to a page where they will ask you to choose a list of incubators.

Tip: This is not explained well on the website, so I shall break it down for you.

Incubators are a list of organizations, colleges, etc that work with the government to guide the startups. There are over 100 incubators on the list, so please do you research on them and then choose the one’s you best think would fit your idea.

The catch is that there is a priority list. The first incubator you choose will be given a priority*. Elaborated further below.

After choosing your incubators and submitting the form, the waiting game begins. You have a dashboard access on the Seed Fund Scheme website that provides regular updates on the status of your application. If all goes well, you’ll receive a notification that asks you to present your idea to an incubator.

You will need to keep checking the SISFS dashboard on a daily basis as there are no email updates or reminders. This is at random. One fine day, you might get a call from one, another a rejection from one and another call from another incubator.

Be very prepared for your pitch, as the quorum is definitely one of the hardest I’ve faced. They will grill you, with good reason. Post your call, the application status goes into under review.

A couple weeks down the line, you will either see your application rejected on the SISFS dashboard or with the status approved.

*Here’s the catch. Say you were contacted by two incubators or even all of them to whom you had applied. And probably all of them offer to fund you. Say Inc 1 offers ₹30L, Inc 2 offers ₹25L and Inc 3 offers ₹40L. You will still be forced to go with Inc 1 as they have a priority among the list you have chosen during the application.

Post Approval

Once approved by SISFS, you will go through a rigorous documentation process (standard), which takes about 2-3 weeks. Once this is done, the funds will be disbursed into your account as per the terms agreed with the incubator (could be lumpsum in one tranche, or several tranches).

Your expected timeline from start of application to disbursal of funds through SISFS should be around 90-120 days.

Cheers and Good Luck to everyone Starting Up!

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By applying for seed fund through SISFS for your startup , you will get a great boost to take your startup to new levels. Hope these above points help clear your doubts as a Desi Founder. Check out more insights about Startups here.