The Venture Center, a Pune-based Government of India Initiative that helps technology innovators and startups, has instituted a Rs. 1 crore seed fund that they plan on investing in early stage technology startups (or even innovators with just a science & technology idea).

Investment proposals are being accepted upto 30 November 2011.

Here are more details from the Venture Center website:

The Entrepreneurship Development Center (‘Venture Center’ ) recently received approval under the scheme “Seed Support System for Start-ups in Incubators” of the Technology Development Board, Department of Science & Technology to host a seed fund with a corpus of Rs 1 crore.

The purpose of the seed fund is to provide a technology driven startup with the much-needed early stage financial support for deserving ideas/technologies requiring up-scaling and related work.

Incubatees of Venture Center are encouraged to contact Venture Center for further information.

Quantum of financial assistance to the incubated entrepreneur

• Minimum: Rs. 1 lakh
• Maximum: Rs. 25 lakhs

The disbursement is normally linked to benchmarks / milestones. Broad Areas to be covered under the financial assistance include:

• Product development
• Testing and trials
• Test Marketing
• Mentoring
• Professional consultancy to engage Professors / experts with small firms
• Filing of Indian/International patents
• Man power for day to day operations
• Any other area as deemed necessary and recommended by the Management Committee.

Here is a list of make/break criteria for applicants:

• There must be at-least one dedicated entrepreneur involved in the venture
• There must be a formal business plan
• The venture and the team must have high ethical & professional standards
• The venture must have a strong technology/knowledge component
• EHS requirements must be met
• Key Proof-of-Concept must be demonstrated & must be reproducible
• The venture must be registered as a private limited company, or must be in the process of registration
• The amount of funding requested must be less than Rs 25 lakh
• The entrepreneur(s) must be willing to share equity in the venture
• The seed funds requested must be for activities such as product development, prototyping, scale-up, developing IP portfolio, test marketing, trials, certification, testing

Applications for the seed fund will be reviewed based on criteria such as (but not limited to):

• Is amount of funding requested enough to reach critical milestone?
• Does the venture have a clear, potentially significant/singular value proposition
• How big/fast growing is the potential market?
• Are target customers clearly identified?
• How credible is the technology? (Is PoC credible in the opinion of subject-matter experts?)
• Are there regulatory/certification/policy risks?
• What are the sources of sustainable competitive advantage (eg. novelty, patentability, etc.)?
• What is the quality of the business plan (revenue model, product roadmap, market segments, etc.)?

Typical terms for seed funding:

• Investment mode: Equity ownership in a private limited company
• Equity stake for seed fund: 10% – 25%
• Investment amount: Rs 1 lakh – 25 lakh (preferably, Rs 15 lakh – Rs 20 lakh)
• Investment to be deployed in instalments, tied to significant milestones
• BoD representation: 1 BoD seat or 1 BoD observer, with special rights
• Promoter/founder stakes: Vesting requirements
• Reporting: Bi-annual presentation to seed committee + Quarterly/annual financials

Application forms can be downloaded here

Business plan templates and other details are available at the Venture Center website

For more information, please contact bdm@venturecenter.co.in