KSUM Seed Support Scheme
KSUM Seed Support Scheme
Over the years, the Government of Kerala has taken various measures to create a vibrant startup ecosystem in the state primarily to foster the growth of innovation lead technology entrepreneurship. One of the precursors of these initiatives is the KSUM Seed Support Scheme. Government has introduced the Seed Support scheme as part of Kerala Startup Mission (KSUM). The key objective of the scheme is to provide financial assistance to startups to foster the formation and development of innovative, technology-based business enterprises. In this article, we will look at the KSUM Seed Support Scheme in detail.
Objective of KSUM Seed Support Scheme
The primary objective of the seed support scheme is to provide financial assistance as soft loans to startups with new and meritorious ideas, innovations and technologies.
- To enable the innovative technologies or ideas to a level where the startup can able to raise investments from an angel capitalist or Venture capitalist
- To enable the startup ideas to reach a position to seek loans from banks or financial institutions
- The KSUM Seed Support Scheme will act as a bridge between development and commercialization of innovative technology, products and services.
Features of KSUM Seed Support Scheme
The features of the KSUM Seed Support Scheme are explained in detail below. The scheme provides the following supports:
- Mentoring
- Product Development
- Testing and Trials
- Test Marketing
- Professional consultancy
- Manpower for operations
- Intellectual Property Rights Issues (PRI)
Eligibility Criteria
The eligibility criteria to avail the benefit of KSUM Seed Support Scheme are explained in detail below:
- The Startup should be a registered firm in Kerala as a Limited Liability Partnership (LLP) or Private Limited firm
- The startup should have an active registration at the time of KSUM Seed support scheme application
- The startup should be working in an innovative product or technology. The seed fund is not given for service startups and SMEs working in trade and commerce
- The seed support will cater to prototype or minimum viable product stage financing for commercialization of the indigenous ideas, innovations and technologies.
- For KSUM scheme, preference will be given to startups with the Department for Promotion of Industry and Internal Trade (DPIIT) startup certification.
- The startup should not have any pending dues with the Kerala Government agencies to avail the benefit of seed support scheme, t
- The startup should not be blacklisted by any Government agency in India to avail the benefit of KSUM Seed Support Scheme
Note: The startups should avail the DPIIT certification before the release of the second tranche of the KSUM seed support fund
Quantum of Seed Support
The limit of the KSUM seed support (financial assistance) to a startup is Rs.15 lakhs. The Seed Expert Committee will examine the proposal in-depth. Based on the quality of the proposal and the presentation, the seed experts committee will decide the amount of seed fund to be sanctioned for the Startups.
The seed loan cannot be used for the following purposes:
- Salaries for the founding team
- Purchase of costly assets( Can be availed through if applicable) 3. Patenting expenses (innovator may claim for reimbursement through the Patent Scheme)
Documents Required
Seed Loan will be disbursed in tranches. The half of the sanctioned amount will be disbursed in the first tranche after collecting necessary documentation, and the remaining amount will be disbursed after the startup submits an interim report with utilization certificate. The list of documents to be submitted are as follows:
Documents for First Tranche
The startups with seed loan sanctioned need to submit a detailed fund utilization plan along with project milestones. The fund utilization plan for the first tranche should be clearly stated along with the interim outcomes expected to be achieved.
- Address ID proof of founder signing the agreement
- Personal Guarantee of the startup
- Address ID proof of witness signing the agreement
- Scanned copy of passbook front page of the company account.
- Stamp paper in name of the firm (Rs.200)
Documents for Second Tranche
- The audited utilization certificates
- Interim progress reports
- Detail plan for utilizing the balance amount and the expected outcome of the project
KSUM Seed Support Scheme Application Procedure
The application procedure for KSUM Seed Support Scheme is explained in detail below:
Startup Registration
- The startup needs to be a registered user of KSUM to access all facilities. The applicant has to access the official webpage of Kerala Startup Mission (KSUM). From the homepage, click on Apply now option.
- By clicking on the apply option, the start-up registration page will be displayed. Provide details of the name (first & last name), email and mobile number.
- After registration, the applicant can log in to the portal using the user credential.
- After creating the profile, the startup can download the seed application. After finishing the application upload it.
Evaluation of Startup
- The applications received by KSUM will first be shortlisted by KSUM team based on the following criteria.
- The startup project should be working on innovative products
- The startup should not be involved in the service delivery
- If the startup has availed financial assistance from KSUM, they have to submit an audited utilization certificate
- Startup Seed support will be provided to an idea stage startup who have innovative product ideas
- If the startup has dues with Kerala Startup Mission (KSUM), dues need to be cleared before availing the startup capital fund.
- Business Plan and usage of Fund – Clear deliverables and outcomes have to mention by startups in their application.
- The shortlisting will be based on the quality of the business plan provided. Product-market fit, early customer feedback, technological capability of the startup are some of the factors considered for shortlisting
- The shortlisted startups will have to submit a 2-minute video introduction of the product along with the pitch deck.
- The shortlisted startups will pitch to the Seed Expert Committee Panel, who will recommend if the Startup is worth for funding. The startup presentation should contain the following details:
- Details of the company
- Details of Products
- The expected outcome of the product
- The total cost of the project
- Briefing of project
- Current Status of startup
- Seed Fund request
- Seed Fund utilization plan with the timeline
- Milestones for the next six months
- The evaluation will be done by the panel based on the following criteria:
- Potential for growth
- Idea and solution usefulness
- Market Study and customer feedback
- Commitment and expertise of the team
- Proposed utilization of fund
Shortlist Announcement
- Startups selected for seed support presentation will be notified through e-mail and official portal at least two weeks before the scheduled day of meeting with the Seed Expert Committee.
- The selected Startups have to confirm their participation within 3 days by submitting the pitch deck and the financial projections.
- The Seed Expert Committee will examine the startup proposal in-depth based on the quality of the project proposal and the presentation will decide on the amount of seed fund to be sanctioned for the Startups
- The committee will suggest the pattern of utilization, which may differ from the plan prepared by the startup. The recommendation of the committee will be finalized normally within 3 working days of the presentation day
- The recommendations of the committee will be submitted to the CEO, KSUM for approval. Fund sanctioned above 5 Lakhs will be approved by IT Secretary, Government of Kerala.
Disbursal of Funds
The disbursal of seed fund will be through cheque in the name of the company. For student innovators, the fund will be transferred to the IEDC bank accounts of their respective colleges.
Agreement for First Tranche
The agreement has to be signed by anyone founders. Rental dues and loan interests dues need to be cleared before the release of the seed loan. After verifying these details, KSUM will execute an agreement with the Startup. The startup is expected to complete this step by visiting KSUM office, Trivandrum. The First Tranche of the fund will be released within 2 days of signing the agreement as account payee cheque.
Release of the Second Tranche of the fund
KSUM will assess the progress before the disbursement of the second tranche of the fund and after the end of the project. The startups have to submit the interim progress update and utilization certificate to initiate the release of the second tranche of the fund.
