The Startup India Seed Fund Scheme (SISFS) does not give money straight to founders. It gives money to incubators, and the incubators choose which startups to fund. That makes the application process different from a bank loan or a normal grant. This guide follows the official DPIIT guidelines for the scheme and explains, step by step, how a startup applies and what happens afterwards. For the wider picture of the scheme, read our Seed Fund Scheme guide first.
Quick facts
- Who can apply: a DPIIT-recognised startup incorporated not more than 2 years ago at the time of application
- Where you apply: online, to up to three incubators in order of preference
- Decision time: the incubator’s committee must select startups within 45 days of receiving the application
- Grant: up to Rs 20 lakh for proof of concept, prototype development or product trials
- Investment: up to Rs 50 lakh for market entry, commercialisation or scaling up, through convertible debentures, debt or debt-linked instruments
- Fees: the incubator must not charge you any fee for selection, disbursement or monitoring
- Last checked: 4 November 2026 against the DPIIT scheme guidelines on startupindia.gov.in (the document is dated January 2021, so confirm current details on the portal)
Step 1: Check that your startup is eligible
The guidelines list these conditions for a startup:
- Recognised by DPIIT, and incorporated not more than 2 years ago when you apply
- A business idea for a product or service with market fit, viable commercialisation and scope for scaling
- Technology used in the core product, service, business model, distribution model or methodology
- Not more than Rs 10 lakh received under any other Central or State Government scheme (prize money, subsidised workspace, founder monthly allowance, lab access and prototyping access are not counted)
- Indian promoters hold at least 51% at the time of application to the incubator
- A startup can receive seed support only once for each of the two kinds of support (grant, and investment)
Preference is given to startups working on areas such as social impact, waste management, water management, financial inclusion, education, agriculture, food processing, biotechnology, healthcare, energy, mobility, defence, space, railways, oil and gas, and textiles. If you do not have recognition yet, start with our DPIIT recognition guide.
Step 2: Choose up to three incubators
The guidelines say a startup can apply to up to three incubators that have been selected as disbursing partners, in order of preference. The application is shared online with each incubator. If your first and second choices both select you, the funding comes from your first choice. If your first choice rejects you and your second selects you, it comes from the second, and so on.
Not every incubator has funds for every sector, so read what each one supports. Our incubators and accelerators guide explains how to compare them.
Step 3: Prepare what the incubator may ask for
The guidelines say you may be asked for details such as:
- Team profile and problem statement
- Product or service overview and business model
- Customer profile and market size
- The amount of funds you need and your plan for using them
Step 4: How the incubator decides
First the incubator shortlists applicants against the eligibility criteria. Then its Incubator Seed Management Committee evaluates the applications. The guidelines name these criteria, and each incubator can assign its own weightage:
| Criterion | What is looked at |
|---|---|
| — | — |
| Need for the idea | Market size, the gap being filled, whether it solves a real problem |
| Feasibility | Technical claims, method for proof of concept and validation, roadmap |
| Potential impact | Customer groups and national importance |
| Novelty | What is new in the technology, and related IP |
| Team | Strength, technical and business expertise |
| Fund utilisation plan | A roadmap for using the money |
| Presentation | Overall assessment |
You may be asked to present to the committee. The committee must select startups within 45 days of receiving the application. You can track your application on the Startup India portal, and rejected applicants are told by email. A rejected applicant can apply again.
Step 5: What you can receive
| Type | Limit | Purpose |
|---|---|---|
| — | — | — |
| Grant | Up to Rs 20 lakh | Validation of proof of concept, prototype development or product trials, paid in milestone-based instalments |
| Investment | Up to Rs 50 lakh | Market entry, commercialisation or scaling up, through convertible debentures, debt or debt-linked instruments |
For the debt route, the guidelines say the interest rate must not be more than the prevailing repo rate, the tenure is fixed when the loan is sanctioned and cannot be more than 60 months, a moratorium of up to 12 months may be given, and the support is unsecured, with no guarantee needed from the promoter or a third party.
Step 6: After selection
- The incubator signs a legal agreement with you before the first instalment, setting out terms and milestones
- Money goes to your company bank account
- For grants, the first instalment must be released within 60 days of receiving your application
- Later instalments depend on milestones, with progress updates and a utilisation certificate
- You submit a final report and an audited utilisation certificate at the end
- The money must be used for the purpose it was given for, and not to create facilities
Common reasons applications fail
The guidelines do not publish a list of rejection reasons, so these are our reading of the criteria, not an official list:
- Recognition missing, or the company is older than 2 years
- More than Rs 10 lakh already received from other government schemes
- Indian promoter shareholding below 51%
- A sector or stage the chosen incubator does not fund
- A weak fund utilisation plan or unclear milestones
Frequently asked questions
Can I apply to the Seed Fund directly?
The guidelines say the Seed Fund is disbursed through eligible incubators. You apply online and your application goes to the incubators you choose.
Do I have to pay the incubator a fee?
No. The guidelines say a selected startup shall not be charged any fees, and the incubator or its staff must not charge any fee in cash or in kind for selection, disbursement, incubation or monitoring.
How long does the decision take?
The committee must select startups within 45 days of receiving the application.
Can I apply again if I am rejected?
Yes. The guidelines say a rejected applicant may apply afresh.
