Startup Odisha Fund of Funds Scheme

What is the Startup Odisha Fund of Funds Scheme?

The Startup Odisha Fund of Funds Scheme is a capital-supply scheme released by the Micro, Small and Medium Enterprises Department, Government of Odisha, with Startup Odisha as the implementing agency. According to the Startup Odisha portal, the scheme was created to foster entrepreneurship and promote innovation by addressing the capital investment requirement of startups during their seed stage.

Startup Odisha's Fund of Funds carries a target corpus of Rs 100 crore, to be disbursed over 5 years with the stated aim of supporting 5,000 startups in the state. The scheme budget is drawn from the treasury and utilised as grants periodically, and the returns generated are reinvested in strengthening the ecosystem rather than returned to general revenue.

The structural point that matters most to founders is in the name. A fund of funds does not write cheques to companies. It puts money into other funds, which in turn invest in companies. Startup Odisha selects SEBI-registered Category I and Category II alternative investment funds and angel funds as partner funds, and the portal is explicit that "the decision to invest is left to the partners".

How does the Fund of Funds actually work?

Three mechanics define the scheme.

Selection of partner funds. Startup Odisha selects SEBI-registered Category I and Category II AIFs and angel funds. Registration with SEBI is the threshold condition. An unregistered angel syndicate or a private investor cannot be a partner fund.

The 1:1 availability agreement. Scheme money is invested in a selected fund under an agreement of minimum availability at a 1:1 ratio to state-registered startups within 5 years. This is the state's protection against a partner fund taking Odisha's money and deploying it in Bengaluru or Gurugram. The obligation runs to state-registered startups, which is why formal Startup Odisha recognition matters for founders hoping to be on the receiving end.

Governance. A high-powered advisory committee led by the Development Commissioner, with principal secretaries of departments including MSME, Finance and Skill Development as members, monitors the scheme and takes periodic decisions on execution of the scheme, eligibility guidelines, and selection of and exit from partner funds.

Startup Odisha describes the intended downstream effect as multiple collateral benefits for startups; investment opportunities, and broader employment avenues for young people as the funded enterprises grow.

Who is eligible for Fund of Funds capital and who is not eligible?

A startup can be in scope if:

• It is recognised by Startup Odisha, which requires the entity to be incorporated not more than 7 years ago, 10 years for biotechnology startups.
• Its annual turnover has not exceeded Rs 25 crore in any preceding financial year.
• If it is not registered in Odisha, it employs at least 50 percent of its qualified workforce in the state.
• It is not an extension of an existing family business and was not formed by splitting up or reconstructing a business already in existence.
• It can show proof of innovation, a DIPP Startup India recognition certificate, a patent filed in the entity's name and published in the Journal of the India Patent Office in a field connected to its business, a sanction letter of funding or grant from the Government of India or a state government under a scheme to promote innovation, or a letter of at least 20 percent equity funding from a SEBI-registered incubation fund, angel fund, private equity fund, accelerator or angel network. A startup with none of these may submit a one-page write-up explaining the innovative nature of its product.

You cannot apply to the Fund of Funds itself. This is the single most common misunderstanding about the scheme, and it is worth stating plainly: there is no government form through which a founder receives money out of the Rs 100 crore corpus. The corpus goes to partner funds. A founder seeking that capital gets Startup Odisha recognition, then pitches the SEBI-registered partner funds and angel networks in the normal way, on normal commercial terms, and the partner fund decides.

Individuals with a business idea but no incorporated entity, sole proprietorships that do not meet the startup definition, family business extensions, and entities past the 7-year or Rs 25 crore thresholds are all outside the recognition net and therefore outside the scheme.

How to apply for Startup Odisha recognition

1. Go to startupodisha.gov.in and complete the online Startup Registration Form, giving self-certification for the required set of documents.
2. Attach the certificate of incorporation — Startup Odisha verifies this against the MCA-21 portal: along with your self-certification on the startup definition and your chosen proof of innovation.
3. Wait for the Nodal Agency to examine the application. It certifies the registration proposal online within 2 weeks and forwards it to the Startup Secretariat. The Nodal Institute may schedule a call or meeting with you within the first week if it thinks that necessary.
4. The Startup Secretariat collates certified applications and places them with its recommendation before the Task Force for consideration and final approval.
5. Check the result, which is published online and emailed to the startup entity. If rejected, you may reapply once after a gap of 3 months.
6. After recognition, approach the SEBI-registered partner funds and angel networks for equity, and separately apply online for the monetary benefits listed below using the standard form on the Startup Odisha portal.

How do the other Startup Odisha benefits work?

The Fund of Funds sits alongside a set of direct grants that a recognised startup can apply for, and these are often the more accessible route for an early company:

• Monthly allowance of Rs 20,000 for one year, or Rs 22,000 where a woman, transgender or SC, ST, SEBC or PH founder or co-founder holds at least 50 percent equity. Qualification requires one of: equity financing of Rs 5 lakh to Rs 1 crore from a SEBI-registered Category I or II AIF or an angel network; a published patent filing; a government funding sanction letter; or a revenue run rate of Rs 50,000 to Rs 10 lakh a month over the last three months.
• Product development and marketing or publicity assistance of up to Rs 15 lakh, rising to Rs 16 lakh for the categories above. Qualification requires equity financing of at least Rs 25 lakh from a SEBI-registered fund or angel network, or a government funding sanction of at least Rs 5 lakh, or a revenue run rate of Rs 2.5 lakh a month over the last six months.
• Need-based assistance towards raw material, components and equipment where the innovation depends on a specific input, decided case by case and subject to approval by the Startup Council.
• Event participation support, economy class air fare or 3-tier AC train fare and free stall space at reputed national and international events where the startup represents the state.
• Subsidised incubation to 50 percent of the monthly rental of incubation space, capped at Rs 5,000 a month for a maximum of one year, at any incubator recognised by Startup Odisha.

The Government of Odisha places special emphasis on startups working on rural impact, social innovation, sustainability, renewable energy and climate change, including education, skill development, health, clean energy, water sanitation and conservation, waste management, agriculture, food security and financial inclusion.

How are the monetary benefits processed and paid?

Once recognised, a startup applies online for a monetary benefit through a standard form. The Nodal Agency reviews the application and shares its review with the Startup Secretariat within 2 weeks of receipt, and may schedule a call or meeting in the first week. The Startup Secretariat then collates applications, carries out due diligence on the documents, and places them with a recommendation before the Task Force within a further 2 weeks. Results are published online and emailed.

On Task Force approval, the money goes directly into the entity's bank account. For the monthly allowance, payment for the first three months is made directly to the recognised startup's registered bank account on a monthly basis, with subsequent releases following the fund release guideline published on the portal.

What are the common reasons an application fails?

• The entity is past the 7-year incorporation limit, or the 10-year limit for biotechnology.
• Turnover crossed Rs 25 crore in a preceding financial year.
• The entity is registered outside Odisha and cannot show that 50 percent of its qualified workforce is in the state.
• The business is a family business extension, or was created by splitting or reconstructing an existing firm.
• No acceptable proof of innovation, and the substitute write-up does not establish anything genuinely novel.
• For the monetary benefits specifically, the funding, patent or revenue thresholds are not met on the date of application.

A rejection is not final. Startup Odisha allows one more application for recognition or financial assistance after a gap of 3 months from the date the rejection was communicated.

Where do I go for help?

Startup Odisha operates from the Odisha Startup Incubation Centre (O-HUB), 2nd Floor, Tower-A, SEZ Road, Chandaka, Bhubaneswar 751024. The toll-free helpline is 1800-345-7100, open from 7:00 AM to 10:00 PM every day except national holidays, and the office line is 0674-2586176. Visiting hours are 10:30 AM to 5:00 PM, Monday to Saturday on working days.

The administrative department is the Micro, Small and Medium Enterprises Department, Odisha State Secretariat, Sachivalaya Marg, Bhubaneswar 751001. District Startup Cells operate at district level, and the Startup Odisha mobile app carries the same registration and benefit forms as the portal. Startup policy documents, including the Odisha Startup Policy and its amendments, are published on the MSME Department's policies page.