Executive Summary
- Four main routes exist: SISFS, Fund of Funds, state schemes, and traditional bank credit
- Equity-linked schemes suit different business stages than debt-based credit
- Karnataka adds state-specific schemes on top of central ones
- Most well-funded startups combine more than one route over their lifecycle
Startup India Seed Fund Scheme (SISFS)
SISFS provides seed funding — typically up to ₹20 Lakh as grant for proof of concept and up to ₹50 Lakh in convertible debentures for market entry — channelled through DPIIT-approved incubators rather than directly to startups. See our dedicated guide on SISFS for the full application route.
Fund of Funds for Startups
The Fund of Funds for Startups (FFS), managed by SIDBI, does not invest directly in startups — it invests in SEBI-registered venture capital funds, which in turn invest in eligible startups. This is an indirect route: founders raise from participating VC funds rather than applying to FFS directly, but FFS-backed funds are specifically incentivised to support DPIIT-recognised startups.
Karnataka State Schemes
Karnataka layers state-specific support on top of central schemes through its own Startup Policy and the Elevate programme, which provides grants and support specifically to Karnataka-based startups — see our dedicated guide on Startup India in Karnataka for how state and central schemes combine.
The Traditional Bank Credit Route
Not every startup needs or wants equity dilution — for ventures with a clear path to revenue and a need for working capital or equipment finance rather than growth equity, CGTMSE-backed PSU bank credit remains a legitimate and often more founder-friendly route. See our comparison in Startup India funding vs CGTMSE for how to choose between them.