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ARTICLE · 18 MAY 2021

Can The Startup India Seed Fund Scheme Be A Game-changer?

The Startup India Seed Fund Scheme gives an impetus to the seed funding initiative of the government. The policy and guidelines were released after the scheme was announced in January 2021.

IndiaCorporate/Commercial Law

The Startup India Seed Fund Scheme gives an impetus to the seed funding initiative of the government. The policy and guidelines were released after the scheme was announced in January 2021. The government has allocated ₹9.25 billion (US$125 million) to the scheme fund over the next four years. The scheme will benefit around 3,600 startups and 300 incubators.

The objective of this sector-agnostic scheme is to provide financial assistance to early-stage startups. A major challenge faced by startups is sourcing seed funding in the early stages of the business. Many startups with innovative business ideas lack the financial means even to test the viability of those ideas, develop prototypes or conduct product trials. Angel investors and venture capital funds usually take the risk of investing in a startup only after verification of the practicality of an idea and banks require security for loans. This scheme aims to overcome capital inadequacy and provide capital for

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