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Seed funding consultancy
seed fund consultancy

Seed Funding Consultancy

Seed funding consultancy is the initial investment given to a startup by an investor or a group of investors in exchange for equity in the company. Pre Seed Funding Consultancy for startups is typically used to help businesses get off the ground, validate their business model, and prepare for future seed fund scheme rounds.

Seed Funding scheme: A boon to the Innovations in the market. 

What is Seed Funding Scheme? 

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The seed Funding Scheme provides financial assistance under the government initiative for new startups at the initial budding stage to help them set foot in the market. According to a study in November 2022 around 656 startups benefited from the startup India seed funding scheme. 
 

Government in the year 2021 The startup India Seed Funding Scheme (SISFS) under the Prime ministership of Narendra Modi started this funding scheme. The scheme was under the imitative of the Department for Promotion of Industry & Internal Goods & idea of the seed funding scheme was to provide lakhs of funds to the upcoming startups, registered under the Startup India registration. The seed funding scheme is working as a golden opportunity for new startups, as when there are new ideas in the market there is a high probability that the private sector does not give helping hands as these startups are not in the position to provide a return on investment at the early stage of growth.

Who are Incubators? 

The Incubator program is designed to help new startups & entertainers run their ventures with funding & support in the initial stage of their business. The incubator process involves help in the Workspace, Training, Mentorship & legal assistance in the early stage. With all this at the early stage, the incubators usually take little to no equity from the business. As at the start ventures do not have a consistent return on investment. 

Benefits of Seed Funding Scheme  

  • Initial Capital -It provides essential funding at an early stage for payrolls, equipment, market research & development, and operational costs. 

  • Validation - To attract seed funding, proof of business idea & work prototype is needed, which creates a sense of validation for improving credibility & create a convincible pitch for the investors. 

  • Mentorship & Advising -   The valuable navigation at an early stage from expert investors who are into entrepreneurship and industry from long ago will be provided under many seed funding programs.

  • Networking Possibilities: The seed funding scheme helps in getting connected with new investors, incubators & other straps to get into collaboration with them. 

  • Equity Retention- The seed funding scheme involves a small amount & additional favors that can go rounds later when the business comes on the right path. Let the inventors have more equity in their own company. 

Steps for Acquire Seed Funding

  • Ideation - The process of creating & explaining the business idea, the target customers, market placement & developing a direct worthful offer. 

  • Startup Plan - Creation of a detailed brief business plan that supports the vision, ground zero analysis, Profit value, marketing strategy & financial forecasts. 

  • Pitch Desk - The summary of the business plan is a clear form of pitch desk. The plan should include the necessary information about the team, market, options, and Funds needed. 

  • Networking - To build connections with possible incubators, including angel Investors, businessman, and other stakeholders. And with all that creating networks & connection with market professionals. 

  • Fundraising Plan - Finalize the funding plan as in what is the amount needed from funds & what will be the equity the business is willing to offer in return for the funds. With that, the usage of funds should be properly mentioned. 

  • Investor Outreach - Seek possible investors for your startup innovation idea & try to reach them with your perfect pitch. Also with this do a study on the interest matters of the investors, to make the pitch relevant to their interests. 

  • Expected Persistence - Be fully prepared for the evaluation by the investors of your business idea & strategies. 

  • Negotiation - After convincing the investor, negotiate on various points such as equity stakes, investment, and other financial assets. 

  • Legal Documentation - When everything is ready for the investors and the investment then, legal professionals should be in scenario to prepare all the drafts, agreements & to ensure that all the documentation goes along with the rules biding the law. 

  • Process Completion -  When all the documents are complete with all agreements & signatures and the fund transfer process is done, the Seed funding round is over. 

  • Utilization of funds - Start using the money for the plan it was sanctioned for, concentrate on the Products, ideas, market, and everything else. 

  • Reporting to Investors- When the process has started the investor should be given all the reports about his funds being used & how the process is moving forward. 

Importance of Seed Funding  

  • It helps minimize the risk for the owner as the money utilized is from the seed funding process 

  • Seed Funding helps with Insufficient funds  

  • It gives a pass to work on funds. 

  • It maintains corporate connections by training strategic aliens.  

  • It promotes and grows the business expansion. 

Eligibility for Seed Funding Scheme (SISFS) 

  • The prime Eligibility for receiving Seed funding is to have acquired a DPIIT certificate, and it should have been incorporated from the time of application not more than 2 years ago. 

  • The startup shouldn't have acquired more than 10 lakh of fund support from any central government grants or schemes. 

  • The Government is supporting startups that are innovative & have a big social impact on the society. This creates special eligibility criteria for any startup to have funds through these government schemes. 

Types of Seed Funding  

For any business to run, the most important is to have funds in the accounts, and for that, there are various kinds of funds under the seed funding scheme as : 

  • Incubators- these kinds of funds are proposed in terms of a small amount of cash or they provide workplace or trainings to the startups. The most important feature of this is that these incubators do not ask for an ownership stake. 

  • Crowdfunding - It has become a popular form in the last few years, with the high rate in social networking in society. According to data, there are more than 500 Crowdsourcing portals. Under this process, people around the globe contribute according to their will to the ideas & visions of the startups.  

  • Angel Investors - This kind of investment under the seed funding scheme is done in exchange for equity or debit to be returned from the business. 

  • Corporate Seed Funding - This kind of seed funding is more prominent in today's new startups as it provides more visibility in the market. Giants like Google, Apple, and Intel deliver these initial funds to upcoming startups.   

  • Accelerators - This particular seed funding scheme idea not just provides startups with funds but gives them access to new business growth vision, training, and mentorship. With this, they also give networks & connections to the startups. And in return, the investors ask for equity share. 

  • Debt Funding - These funds come directly from banks or other Financial institutions. The funds received via this are in the form of loans. But when loans are taken come under the money is been received from friends and family & will consider under this kind of used funding scheme.  

  • Venture Capital Funding - These consist of big tycoons who are going to decide where to put their money into. Their vision on funding depends on market scales & other prospects like business growth chances Venture Capital Funding. 

  • Government Grants - Indian Government is working actively to promote & empowering the ecosystem of startups via various initiatives. The government departments & different ministries work dedicatedly to support & grow of various startups working under their ministers & departments. 

    These projects work with startups for the growth of startups by helping them with funds & investment & with that necessary resources & support are also provided under these grants to the startups. 

Few of Government Grants Scheme  

  • Startup India Seed Fund Scheme (SISFS): - the scheme helps in the initial stage of the startups as the selected venture receives funding up to 5 crores. The startups for conceptual development get 20 lakhs & the startups for scaling their product & services receive up to 50 lakhs. 

  • Atal Innovation Mission: This grant was launched in 2016, with the idea to help & assist startups in various sectors such as health, education, agriculture & transportation. This government grants provide up to 10 crores approximately to the firms who have covered 5 years of firm eligibility.  

  • Multiplier grants scheme (MGS): Under the Department of Electronics & Information Technology had started the Multiplier grant scheme to promote joint research & development in the sector. Under this grant, the startups receive a 2-crore maximum amount for a particular duration of less than two years. 

  • Dairy Entrepreneurship Development Scheme (DEDS): The prime focus of this grant is to create self-employment in the dairy sector, DEDS helps startups related to milk production, procurement & conversation with marketing of the same. It also offers Back end capital which will cover 25% of the total project for the general category & 33.33% for SC-ST category farmers. 

  • Startup India Initiative: It is the most popular initiative provided by the government in the form of grants .it provides tax benefits to startups for 5 years. Under this grant, around 114,000 startups are been funded. 

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