Startups Note: NSTEDB Seed Fund for funding from Rs 2L to 50L open

Venture Center, the entrepreneur development center that is housed in NCL has recently received approval under the scheme “Seed Support System for Start-ups in Incubators” of the National Science & Technology Entrepreneurship Development Board (NSTEDB), Department of Science & Technology to host a seed fund with a corpus of Rs 2 crore.

The Seed Support is for incubatees (physical resident units within STEP/TBI). The funds are meant for early stage funding for indigenous ideas and 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. 2 lakh
  • Maximum: Rs. 50 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 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 offering’s (Vs Service offerings)
  • IP-rich enterprises
  • Strong knowledge components in enterprises

The seed fund is only for

  • Companies with minimum 51% ownership by Indian nationals
  • Companies ready to be incubated at Ventuer Center

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 50 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: 15% – 25%
  • Investment amount: Rs 2 lakh – 50 lakh (preferably, Rs 30 lakh – Rs 40 lakh)
  • Investment to be deployed in instalments, tied to significant milestones
  • BoD representation: 1 BoD seat
  • Promoter/founder stakes: Vesting requirements
  • Reporting: Bi-annual presentation to seed committee + Quarterly/annual financials

Application form can be downloaded here

Business Plan Templates

  • Sample business plans
  • Business Plan and Competitions in India
  • Virtual Ink (Source)
  • The Nuts and Bolts of Business Plans (Source)
  • Entrepreneurship 3: Business Plans (Source)

For more details, look here

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