India continues to ride on the startup boom as it emerges as the third-largest startup ecosystem in the world. It has witnessed a massive 15,400% rise in the number of startups in the last six years. While this is welcome news, the growth has intensified the fundraising competition among startups.
Business grants are one of the alternatives to raise funds for your startup, especially if you are hesitant to dilute your equity stake or debt. Business grants increase your startup’s visibility and credibility in the eyes of stakeholders and investors. They also enhance your chances of receiving government subsidies or grants from other organisations.
Here is all you need to know about applying for a grant to start a business.
What is a Grant to Start a Business?
A business grant is a financial assistance to a startup under a government or private institution scheme. A grant is usually ‘free’ money – you don’t have to pay it back. For instance, four Indian startups received an equity-free grant of $15,000 each from seed accelerator firm Y-Combinator in 2020.
However, there may be infrequent exceptions. You may avail of a grant for your startup in the form of a loan at a nominal interest. In some cases, collateral-free loans at zero interest are also there.
Top Startup Business Grants in India
If you are looking for a grant to start a business, there are various schemes you can apply for:
1. Startup India Seed Fund Scheme (SISFS)
Grant Amount: Up to Rs 20 lakh
SISFS is a sector-agnostic funding initiative of the Government of India. Department for Promotion of Industry and Internal Trade (DPIIT)-recognised startups can get the grant in milestone-based instalments.
You can utilise the grant for the following:
- Validation of proof of concept
- Prototype development
- Product trials
SISFS invites an online call for applications on an ongoing basis on the Startup India portal.
2. Technopreneur Promotion Programme (TePP)
Grant Amount: Up to Rs 50 lakh
TePP is the brainchild of the Department of Science and Industrial Research under the aegis of the Ministry of Science and Technology of the Government of India. TePP is a part of Promoting Innovation in Individuals, Startups, and MSMEs (PRISM) scheme for independent innovators across industries.
You can utilise the funds to transform your business idea into working prototypes, processes, or models. Startups working in green technology, affordable healthcare, clean energy, and water and sewage management get more preference under TePP.
3. NASSCOM 10,000 Startups
Grant Amount: Variable, up to $5000
National Association of Software and Service Companies (NASSCOM), the premier body for the Indian technology sector, runs several programmes to fund startups. A few of its prominent incubation programmes are Warehouse, Virtual, We (for women entrepreneurs), and Tech. The selected startups get access to NASSCOM’s network of investors, accelerators, mentors, and industry alliances.
If you want NASSCOM’s grant to start a business, you should have a minimum viable technology product (services are excluded). The development should have progressed to the next stage from ideation. You can apply and utilise the grant as per NASSCOM guidelines.
4. Amrita TBI
Grant Amount: Up to Rs 1 crore
This non-profit startup incubator has backing from the Government of India and Amrita Vishwa Vidyapeetham, a NAAC-accredited A-grade, multi-campus, multi-disciplinary teaching and research institution. Amrita TBI is among the 6 incubators NITI Aayog’s Atal Innovation Mission (AIM) has chosen to create world-class incubation facilities.
Amrita TBI provides a grant to start a business in the early stage and growth startups with developed ideas in the technology sector. It also supports raising seed investment and additional funds in subsequent rounds. You can apply and, if selected, deploy the grant towards the purpose specified by Amrita TBI.
5. Biotechnology Ignition Grant Scheme (BIG)
Grant Amount: Up to Rs 50 lakh
A flagship programme of the Biotechnology Industry Research Assistance Council (BIRAC), BIG is the most coveted grant among early-stage biotech startups. The purpose of this grant is to encourage disruptive business ideas with colossal commercialisation potential.
You can utilise the grant to validate and upscale the idea to proof of concept. However, you must complete the project within 18 months of the grant.
BIRAC invites applications twice a year – 1st January and 1st July. The window for submission of proposals remains open for 45 days.
6. Other Schemes
A few more grants available for startups in India are:
- MeitY SAMRIDH Scheme (up to Rs 40 lakhs)
- Support for International Patent Protection in Electronics and Information Technology (SIP-EIT) (up to Rs 15 lakh)
- High Risk – High Reward Research (No specified limit on the grant)
You can also participate in startup competitions to connect with the investor community for grants.
Tips to Apply for a Grant to Start a Business
The application process and guidelines for grants vary across the schemes. However, there are some general tips you should keep in mind:
- Gather complete information on the grant – grant amount , last date of application, terms and conditions, etc.
- Take the help of your mentors or industry professionals to fill out the application or submit the proposals.
- Follow up with grant funders regularly to ensure that you have submitted everything they need to evaluate your application.
Final Thoughts
A grant to start a business is a great fundraising option as it carries no financial obligation for your startup. These days, an increasing number of government bodies and private institutions are offering startup grants.
However, it is just as challenging to get a grant as it is the case with any other fundraising round. You need to understand the nitty-gritty of fundraising to turn the investor vote in your favour.
Scalix understands your dilemma and struggles as a startup entrepreneur. It can mentor you to build a scalable and sustainable startup.
Sign up for Scalix’s Early Founder Programme or join its Fundraising Cohort to know more.
