The word “startup” means a business in its initial phase of activities. Startups are established by at least one entrepreneur who wants to produce a product or provide a service for which he/she believes there is demand in the market. These organizations more often than usual start with significant expenses and restricted income, which is the reason they search for capital from various resources. so, Government launch Start-up India Seed Fund Scheme.
But the major problem incurred by such startups while attempting to procure capital is that they are so new and fresh that they have no credibility such as proof of concept or an asset base, based on which banks or other non-banking financial institutions can give out loans or contribute capital in other ways.
The Indian Start-Ups have been fairing extremely well in the current business ecosystem of the country and the world in general. In just a few years, India has managed to make it to the list of top 3 countries after the USA and China, with the most flourishing startup environment and it seems to show no signs of slowing down.
In a country as big as ours with the second-highest population in the world, Startups have provided a great opportunity to multiple people who have business acumen but have not been able to fit themselves in the conventional working system of the country. Start-ups allow people to be their bosses and enjoy the autonomy that comes with owning one’s own business without much interference from outside.
START-UP INDIA SEED FUND SCHEME
Tracking the growth rate of Startups in India and realizing all are the obstacles involved in setting up a successful start-up, the Indian Government has taken various steps like Start-up India Seed Fund Scheme to help foster an ecosystem that encourages more and more entrepreneurs to work on their startups.
During the event of the Start-Up India International summit on 16th January 2016, Mr Narendra Modi, honourable Prime Minister announced the launch of ‘STARTUP INDIA’ under the Department for Promotion of Industry and Internal Trade (DPIIT). Under the seed funding scheme of the initiative, capital will be provided to startups for various activities such as:
- Proof of concept
- Prototype development
- Market entry
This would empower these startups to graduate to a level where they will be able to raise capital through private supporters or investors or look for credits from business banks or monetary organizations.
The government has allocated a budget of Rs. 945 crore for this Start-up India Seed Fund Scheme which will be used to provide up to Rs. 50,00,000 to each startup via incubators.
So, the government will avail the funds to incubators which in turn will further provide the same to startups and their entrepreneurs. With the use of such funds provided under the Start-up India Seed Fund Scheme, the startups will be able to meet the basic requirements necessary to start a successful business for eg. proof of concept, prototype development, market entry and commercialization.
Once the government has provided sufficient funding to the start-up, the business will be able to function much more smoothly and have a much higher success rate as compared to 2016 when no such provision was available to aspiring entrepreneurs by Start-up India Seed Fund Scheme.
WHAT ARE INCUBATORS?
Incubators are organizations that are tasked to promote creativity and encourage entrepreneurship amongst the citizens of the country. They provide capital in the form of both funds and infrastructure to startups to help them in various initiation activities of a business. These Incubators get incentivized by the government and they, in turn, assist entrepreneurs in the form of funds and infrastructure.
Under the Start-Up India Seed Fund Scheme, 2021 the incubators can register themselves through the official portal and once verified and approved by the government, they will be provided with Start-up India Seed Fund Scheme. Then start-ups will reach out to such incubators and seek funding from them.
In case of a start-up want to apply for such funding directly in Start-up India Seed Fund Scheme, they can do the same via the official portal and once registered, they can choose from various official incubators and pick the one which suits them the best.
This way, not only are startups provided with funding but they are also given enough autonomy and flexibility to decide things at their convenience.
BENEFITS OF START-UP INDIA SEED FUND SCHEME
The goal of this area freethinker plot is to give monetary help to the beginning phases of startups. A significant challenge faced by startups is sourcing seed funding in the beginning phases of the business. Numerous startups with inventive business thoughts come up short on the monetary means even to test the reasonability of their product or services, foster models or lead item preliminaries.
Private backers and funding reserves normally face the challenge of putting resources into a startup solely after confirmation of the common sense of thought and banks require security such as a strong asset base for credits. The Start-Up India Seed Fund Scheme expects to conquer capital insufficiency and give funding for confirmation of the idea, model turn of events, product trials, market passage and commercialization to chosen startups through Incubators across India.
Start-up India Seed Fund Scheme will especially help Startups in smaller towns with lesser financial assistance options to receive funding directly from the government without having to go through the hassle of finding private investors, especially when the start-up is in its initiation stage and investors and lenders have their reservations about such investments.
This plan is worked by the public authority not simply to advance the new age of businesspeople, yet in addition to making a powerful startup ecosystem that will produce business, especially in more modest towns. The seed funding is most likely going to help startups in areas that have gotten less assistance from venture financing than those, for example, online business, food tech, travel and education.
The plan will advance virtual hatching for startups by setting up an internet-based system. This will empower the plan to have a more extensive reach, and permit it to adapt to the continuous pandemic circumstance. Simultaneously, the intricate qualification models and administrative cycles might make the execution of the planned testing.
The size of the Startup market share of India in 2021 has almost doubled in the past year since 2020 and currently stands at $1.2 billion and the government has taken up various initiatives to encourage more entrepreneurs to float their own business as per the demands of the customers.
From small home-based businesses involved in making resin jewellery to more formally organized businesses with a wide circuit of functioning, the Startup India Seed Fund Scheme will benefit all and provide a more lucrative operational environment that will help Startups establish and flourish.
Apart from Startup India, the government has launched initiatives to nurture the potential of Startups in our country. A few of these programs are
- Make in India initiative: To utilize the potential of our population and production capacity
- Startup Innovation challenge: It is an incredible open door for any startup to use their systems administration and raise money endeavours.
- Ranking of states on support to Startup ecosystem: It is a developed assessment apparatus expected to reinforce the help of States and UTs to comprehensively fabricate their startup environments.
- Shanghai Cooperation Organization: Startup Forum was dispatched in October 2020 to create and further develop startup biological systems on the whole.
- Prarambh: The ‘Prarambh’ Summit aims to provide a platform for startups and young minds from around the world to come with new ideas, innovations and inventions.
With all these initiatives in place, this is the best time for any entrepreneur in India to invest their time, talent and resources into their Startup businesses. The government’s constant endeavour for the past few years has been to look inwards into the Indian market and focus on ways to promote more and more Indians to produce goods and services in the country itself rather than importing such things from other countries.
Therefore, The Startup India Seed Fund Scheme will help startups overcome the problem of initial funding of their businesses to indulge in activities like prototype development, entering the market, marketing the business and commercialization of their ideas.