The Seed Support System primarily supports the startups on the following:

• Product Development

• Testing & Trials

• Test Marketing

• Mentoring

• Professional consultancy (To attract professionals from leading industrial organisations and academcians from reputed educational institutions to work with small firms)

• IPR Issues

• Manpower for day to day operations

Objective

The basic idea of seed support is providing financial assistance as soft loans to startups with new and meritorious ideas, innovations and technologies. This would enable some of these innovative ideas/technologies to graduate to a level where they will be able to raise investments from angel/Venture capitalist or they will reach a position to seek loans from commercial banks /financial institutions . Thus the proposed seed support is positioned to act as a bridge between development and commercialisation of innovative technologies/products/services.

Eligibility Criteria

You are eligible to apply if you are

1. Startup should be a registered company in Kerala as an LLP or Pvt. Ltd company and should have an active registration at the time of application

2. The startup must be working in an innovative product or technology. The seed fund is not generally given for service startups and SMEs working in trade and commerce

3. The seed support would generally cater to prototype/MVP stage financing for commercialization of the indigenous ideas , innovations and technologies.

4. Preference will be given to startups with DIPP startup certification. In any case the startups shall get such certification before the release of second installment of seed capital

5. The startups shall not have any other pending dues with any of the Government agencies and shall not be blacklisted by any Govt. agency in India

Quantum of Seed Support

The upper limit of seed support to a startup is Rs. 15 lakhs. The Startup will be examined all cases of seed support before putting the matter up to the Seed Support Expert Committee for selection. After the seed support is recommended to a startup, the terms of agreement with the incubate startup should be framed by linking progress milestones, monitoring norms and reasonable repayment and recovery provisions. Startups requiring seed support for only capital equipment may not be encouraged.

How to Apply

1. Register in Startup Mission Web Portal https://startupmission.kerala.gov.in as a member with basic details.

2. A profile will be created, where you can submit the seed application by downloading seed application form and uploading it.

Shortlisting Process

The applications received by KSUM will first be shortlisted by KSUM team based on the following criteria.

1. The startup must be working on an innovative product or technology and not involved in pure service delivery

2. If startup has availed any previous funding support from KSUM, they need to submit an audited utilisation certificate for the same

3. Current Stage of the Startup Seed support is generally not given for an idea stage startup except in case of a few who have very innovative product ideas Idea Stage startups can apply for idea grant scheme for funding

4. If the startup has any dues with KSUM, that need to be cleared before availing the fund.

5. Business Plan and usage of Fund – Clear deliverables and outcomes have to mentioned by startups in their application. The shortlisting will be based on the quality of business plan provided. Product-market fit, early customer feedback, technological capability of startup team to execute the project are some of the factors considered for shortlisting

The shortlisted startups will be asked to submit a 2-minute video introduction of the product along with the pitch deck. The shortlisted startups will then pitch to the Seed Expert Committee Panel, who will recommend if the Startup is worth for funding.

Shortlist Announcement

Startups selected for seed support presentation will be notified through email and portal at least two weeks before the scheduled day of meeting with the Seed Expert Committee. Applicants who were rejected will also be notified through email. It should be noted that 10 startups shortlisted will be called for the upcoming Seed Expert Committee Panel. Others may re-apply with an improved application .

Participation Confirmation

The selected Startups are expected to confirm their participation within 3 days by submitting the pitch deck and the financial projections.

Selection Panel

For recommending the applications for seed support system, KSUM constitutes a committee called the Seed Support Expert Committee whose members would be experts who can evaluate the prospective startups requiring seed support. At least 2 external experts with related domain expertise will be the part of the panel. Suggestive composition of Seed Expert Committee would be as follows:

1. Domain experts/ successful Entrepreneurs

2. Finance Manager, KSUM

3. Seed coordinator

Selection Criteria

The startups will pitch their product to the Expert Committee. Also ensure that the presentation contains Company and product Briefing, Current Status, Total cost of the project and fund request, Fund utilization Plan with timeline, expected outcome from the product and milestones for next 6 months. Evaluation will be done by the panel based on the following criteria:

1. Idea and solution usefulness

2. Potential for growth

3. Commitment and expertise of the team

4. Market Study and customer feedback

5. Proposed utilisation of fund

Selection Process

Normally the startups have to make a presentation in front of the Seed Expert Committee in person. In rare cases, the presentation over skype,zoom etc are also allowed. The committee will examine the proposal in depth and based on quality of the proposal and the presentation will decide on the amount seed fund to be sanctioned for the Startups, The committee may also 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

Sanction of Seed Loan

The recommendations of the committee will be submitted to the CEO, KSUM for approval. Fund sanctioned above 5 Lakhs will need to be approved by IT Secretary, Govt. of Kerala, who is also the Chairman of KSUM Executive Committee. Additional reviews if necessary will be arranged by the KSUM team. Startups thus sanctioned will be notified through email.

Documents for First Tranche

The startups with seed loan sanctioned are expected to submit a detailed fund utilisation plan along with project milestones. The fund utilisation plan for the first tranche should be clearly stated along with the interim outcomes expected to be achieved. The list of documents to be submitted are as follows:

1. Address ID proof of founder signing the agreement

2. Address ID proof of witness signing the agreement

3. Personal Guarantee of the startup

4. Scanned copy of passbook front page of the company account.

5. Rs.200 worth Stamp paper in name of the company.

Agreement may be signed by anyone founders. Rental dues and loan interests dues (if any) need to be cleared before 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 fund will be released within 2 days of signing the agreement as account payee cheque .

Repayment Guidelines

The seed fund is given to startup as a soft loan carrying a simple interest of 6% per annum. Normally, the startup can avail 12 months of moratorium on repayment and the entire amount along with interest have to be repaid in 36 monthly installments, as per the loan repayment schedule given along with the seed fund disbursal agreement. In order to support the startups, the repayment is first accounted against the principal and interest portion need to be paid only after completion of repayment of the principal. . The enterprise will have an option to prepay to the K-SUM, the entire outstanding of the loan assistance together with all outstanding interest and other charges thereon, without any pre-payment penalty.