Pune-based Government-funded Startup Incubator, Venture Center, (winner of a national award for best technology incubator in 2015) is hosting a seed fund with a corpus of Rs 10 crore under the scheme “National Initiative for Developing and Harnessing Innovations – Seed Support System (NIDHI-SSS)” of the Department of Science and Technology.
The basic idea of NIDHI seed support is providing financial assistance to potential startups with promising ideas, innovations and technologies. This would enable some of these incubatee startups with innovative ideas/technologies to graduate to a level where they will be able to raise investments from angel/Venture capitalist or they will reach a position to seek loans from commercial banks /financial institutions. Thus the proposed seed support disbursed by an incubator to an incubatee is positioned to act as a bridge between development and commercialization of innovative technologies/products/services in a relatively hassle free manner.
Broad Areas to be covered under the financial assistance include:
- Product development
- Testing and trials
- Test Marketing
- Professional Consultancy ( To attract Professors of institutions to work with small firms)
- IPR issues
- Man power for day to day operations
- Any other area as deemed necessary and recommended by the Management Committee.
The Seed fund emphasizes:
- Alignment with Venture Center’s Focus areas
- Product offerings (vs service offerings)
- IP-rich enterprises
- Strong knowledge components in enterprises
Eligibility Conditions for start-ups to apply for seed support
- Incubatee should be a registered company in India
- Incubatee has to be an Indian start-up. This support is not meant for Indian Subsidiaries of MNCs/foreign companies. Persons holding Overseas Citizens of India (OCI), Persons of Indian Origin (PIO) would be considered as Indian citizens for the purpose of this scheme.
- The share holding by Indian promoters in the incubate start up should be at least 51%.
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 idea and team should be technically sound
- 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
- The team should show potential and credibility for raising money in future
- 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 100 lakh
- The entrepreneur(s) must be willing to share equity in the venture
- The applicant must be or willing to be resident incubatee of Venture Center before investment
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:
- Selected start-up should be/become a resident incubatee of Venture Center and should have completed three months of residency at Venture Center at the time of seed fund investment.
- Investment mode: Equity ownership in a private limited company
- Investment amount: Up to 100 lakh
- BoD representation: 1 Board Nominee Director and/or observer of Venture Center
- Reporting: Bi-annual presentation to SEED Fund committee + Annual financials/MIS
Application form can be downloaded here.
Interested start-ups are encouraged to contact Venture Center for further information @ email@example.com / 020 25865877/78/76