Startup India Seed Fund Scheme- For Incubators

₹5

1. A Grant of up to ₹5 (five) crore would be provided to a selected incubator in milestone-based three (or) more installments.

₹1.0 Cr

1. A component of Management Fee @ 5% of the Seed Fund grant to the incubator will be provisioned (i.e. if an incubator is granted ₹1 crore of Seed Fund, then by including management fee @ 5%, the total assistance would be ₹1.050 crore).

Note 01: The exact quantum of grant and installments for each incubator will be decided by the Experts Advisory Committee (EAC) based on its evaluation.

Note 02: Incubators shall use the grant only for disbursal to eligible startups and shall not use the grant for facility creation or any other expenses.

Note 03: The Management Fee provisioned for incubators shall not be used by the incubator for facility creation or any other administrative expenses. The Management Fee will be utilized for administrative expenditure, selection and due diligence of startups, and monitoring of the progress of beneficiary startups.

Note 04: Installments shall be released to incubators upon submission of proofs of achievement of milestones as decided by EAC. A Proportionate Management fee shall also be released with each installment.

Note 05: The quantum of the first installment may be up to 40% of the total approved commitment. When the cash-in-hand of the incubator goes below 10% of the total commitment by EAC, the Incubator may request for the next installment, which shall be released to the incubator within 30 days of submission of proof of achievement of milestones.

Note 06: The grant should be utilized fully by the incubator within a period of three years from the date of receipt of the first installment of funds.

Note 07: If the Incubator has not utilized at least 50% of the total commitment within the first 2 years, then the Incubator will not be eligible for any further drawdowns. It will return all unutilized funds along with interest.

Note 08: Interest earned on all unutilized funds available with incubators shall be taken into account and adjusted at the time of the next release.

Note 09: The financing of beneficiaries will be done with efficiency and care. Selected incubators would be responsible for proper management and disbursement of the Seed Fund.

Note 10: The selected incubator shall maintain a transparent process of selection, monitoring, and disbursement mechanism for the fund. Seed Fund would be disbursed to selected startups after due diligence by the incubator.

Note 11: The incubators shall be responsible for providing physical infrastructure to the selected startups for regular functioning, support for testing and validating ideas, mentoring for prototype or product development or commercialization, and developing capacities in finance, human resources, legal compliances, and other functions. They are also expected to provide networking with investors and opportunities for showcasing at various national and international events. If the selected startup does not want to utilize the physical infrastructure of the incubator, the incubator shall offer all other resources and services to the startup.

Note 12: A startup selected by an incubator for assistance under this scheme shall not be charged any fees.