Chitkara Innovation Incubator Foundation (CIIF), Chitkara University, Punjab is calling applications for Seed Support under DST NIDHI Seed Support Program.

About the Scheme

Chitkara Innovation Incubator Foundation (CIIF), Chitkara University is hosting a seed fund program for startups under the NIDHI Seed Support Program of the Department of Science and Technology. Under this program, the seed support may be between INR 10 - 25 lakh. In exceptional cases, it may be higher.

Eligibility Conditions for Startups

  • The applicant startup must be a company registered in India, preferably be a DPIIT registered/applied startup and should have completed a minimum 3 months of association with CIIF in its resident or virtual incubation program.
  • The applicant startup should have developed clarity on Unique Selling Preposition (USP) through customer validation and value proposition for its targeted customers.
  • This support is not meant for Indian Subsidiaries of MNCs/foreign companies. Persons holding Overseas Citizens of India (OCI), Persons of Indian Origin (PIO) would be considered as Indian citizens for the purpose of this scheme.
  • The share holding by Indian promoters in the incubate start up should be at least 51%.
  • Preference will be given to startups, who have not availed any funding from any Government of India / State Govt. body.
  • Preference may be given to startups with funding commitments from an external investor (Angel, VC, etc).

Here is a list of make/break criteria for applicants

  • The founders should be working full time on the startup.
  • The startup must have clear roadmap and business / revenue generation plan.
  • The idea and team should be technically sound
  • The team should show potential and credibility for raising investment in future.
  • The venture must be registered as a private limited company
  • The startup must be willing be share equity in the startup against the funding support.
  • The applicant must be an incubatee of CIIF or should be willing to be incubated at CIIF for three months before getting eligible for funding.
  • The startup shall not have received funding support under Seed Support Program from any Incubation Center / Center of Excellence / Innovation Hub or similar organizations in India.

Typical terms for Seed Funding

  • The startup will be selected by Seed Support Management Committee (SSMC) constituted by CIIF. The decision of SSMC will be considered final.
  • Selected start-up should be / become an incubatee of CIIF
  • Investment mode (to be decided by SSMC):
    • Equity
    • Compulsorily Convertible Preference Shares
    • Compulsorily Convertible Debentures
    • Debt
  • Equity exit will be considered within 3 to 5 years. Options for exit will be either buy-back of the shares by promoters or selling shares to the shareholders or selling them during the next round of VC investment or any other follow-on investment.
  • BoD representation: 1 Board Nominee Director and/or observer of CIIF
  • Reporting: Bi-annual presentation to the SSMC & sharing of Financials / MIS
  • An Investment Term Sheet will be prepared with the startup eligible and selected for the seed support, inclusive of the key terms like Funding Amount, Purpose of funding, Mode of Investment and terms of repayment or exit criteria, pre & post-investment cap table, RoFR, Tag along, and drag along, etc.
  • Equity will be taken on pre-money valuation.
  • A legal agreement (Shareholder agreement), including the term sheet details will be signed between the startup and CIIF.
  • Half Yearly Financial and Progress reporting to SSMC, and Annual Audited Balance Sheet reporting.

Utilization of Seed Support by Startups

  • The seed support should be utilized largely for technology development and de-risking activities, scale-up, market entry, product development, mentoring, seeking consultancy, IPR issues, and all such startup activities.
  • Not more than 10% of the fund can be directed towards team salaries.
  • The seed support should not be used for:
    • Repayment of loans or dues of promoters and their associates to the company.
    • Creation of personal assets.
    • Repayment of loans from any other source or for payment of interest on the support borrowed from such other source.
    • Extending loan support to promoters or their associates
    • Making any inter-corporate deposits or any speculative purpose.
    • Personal benefit of promoters or their associates.
    • Company/ Promoter buying shares or any other security of the company or any other company and any other areas defined by the local level committee at the Incubator level.

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