NIDHI-Seed Support System is an initiative of the National Science & Technology Entrepreneurship Development Board (NSTEDB), Department of Science & Technology.

A wide gap exists in financial support required by technology-driven start-ups in their initial phase which is not being addressed properly. The basic idea of seed support is providing financial assistance to potential startups with promising ideas, innovations, and technologies.
NIDHI Seed Support Scheme  (NIDHI-SSS) aims at providing financial assistance to startups for proof of concept, prototype development, product trials, market-entry, commercialization, etc.

NIDHI Seed Support Program Highlights:

1) Loan, Equity, or Equity-linked instruments as the mode of financing/investing in start-ups.

2) The lowest interest rate of only 2-3 % in the case of debt financing for start-ups.

3) Avg. Seed Fund Amount for Startups is Rs. 25 Lakhs which goes upto 100 Lakhs per startup

Time Period: 2-Years

Area: All Science Disciplines

Pan India program supports considering “Virtual” incubation.

The focus of NIDHI seed support is providing financial assistance to potential startups with promising ideas, innovations, and technologies. This would enable some of these incubated startups with innovative ideas/technologies to graduate to a level where they will be able to raise investments from angel/Venture capitalists 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 incubator is positioned to act as a bridge between the 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
  • Mentoring
  • Professional Consultancy ( To attract Professors of institutions to work with small firms)
  • IPR issues
  • Manpower for day-to-day operations
  • Any other area as deemed necessary and recommended by the Management Committee.

The Seed fund emphasizes:

  • Alignment with  IIMCIP’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), and Persons of Indian Origin (PIO) would be considered Indian citizens for the purpose of this scheme.
  • The share holding by Indian promoters in the incubate start-up should be at least 51%.

Selection Criteria:

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

  • There must be at least two dedicated entrepreneurs ( Directors)  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
  • The amount of funding requested must be less than Rs 50 lakhs
  • The entrepreneur(s) must be willing to share equity in the venture
  • The applicant must be or willing to be a resident incubatee of  IIMCIP before investment

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

  • Is the amount of funding requested enough to reach a 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:

  • The selected start-up should be/become a resident incubatee of  IIMCIP and should have completed three months of residency at  IIMCIP at the time of seed fund investment.
  • Investment mode: Equity ownership in a private limited company
  • Investment amount: Up to 50 lakhs
  • Reporting:  Annual audited  financials, Monthly Progress Reports