Rajasthan Startup Policy 2022, Pre-Seed Ideation Grant

What is the Rajasthan Startup Policy 2022 pre-seed grant?

The Rajasthan Startup Policy 2022 pre-seed grant is officially called the Ideation Grant, and it sits at the bottom rung of the funding ladder that the Department of Information Technology and Communication (DoIT&C) runs through the iStart Rajasthan platform. According to the iStart schemes page, all pre-seed stage startups registered under the iStart programme are eligible for a grant of INR 2,40,000 where the concept meets the Evaluation Committee's criteria, and women-led ventures with more than 50 percent women founders receive an additional INR 60,000.

The purpose of a pre-seed grant is narrow and it helps to be clear about it. It is not working capital and it is not a substitute for revenue. It is the money that carries a team from an idea to something demonstrable. A prototype, a first pilot, a validated user test; at the point where no investor will yet write a cheque. Rajasthan sizes it accordingly: Rs 2.4 lakh is enough for a few months of build, not enough to run a company.

Everything under the policy is anchored to iStart registration. iStart is the state's integrated startup platform, and registration on it is the gate through which all Rajasthan startup benefits pass, grants, incubation, and the state's funding instruments alike.

Who is eligible for the pre-seed grant, and who is not eligible?

Rajasthan uses the DPIIT definition of a startup, which the department reproduces in its own scheme text. Under it, an entity qualifies as a startup for up to ten years from the date of incorporation or registration if it is:

• Incorporated as a private limited company under the Companies Act, 2013, or
• Registered as a partnership firm under section 59 of the Partnership Act, 1932, or
• Formed as a limited liability partnership under the LLP Act, 2008.

You can apply if:

• Your entity meets one of the three legal forms above and is within ten years of incorporation.
• Turnover in no financial year since incorporation has exceeded Rs 100 crore.
• The entity is working towards innovation, development or improvement of products, processes or services, or is a scalable business model with high potential for employment generation or wealth creation.
• The startup is registered on the iStart Rajasthan platform.
• The startup is at pre-seed stage, an idea or early prototype, not a company already in market with traction.

You cannot apply, or are not eligible, if:

• The entity was formed by splitting up or reconstructing an existing business. The department states plainly that such an entity shall not be considered a startup.
• You are an individual with an idea but no registered entity. The grant is paid to an entity's bank account.
• The entity is more than ten years old, or has crossed Rs 100 crore turnover in any financial year.
• The startup is past pre-seed stage. Later stages are served by the Viability Grant, the Scale Up Fund and the Startup Equity Fund instead.
• The Evaluation Committee does not clear the concept. The grant is conditional on the idea meeting the committee's criteria, not automatic on registration.

iStart selection is sector agnostic. The department states its focus on innovative solutions in social and clean-tech, mobile and information technology, Internet of Things, "IT for X" applied to garments and crafts, mining, and SME manufacturing and services, and on disruptive ideas or technologies in any sector.

How much money does the pre-seed grant give?

The grant is not repayable. That distinguishes it sharply from the state's Techno Fund, which is a soft loan carrying 5 percent interest on a reducing balance repayable in six monthly instalments over a maximum of three years, and from the Scale Up Fund, which is delivered as debt convertible to grant.

How to apply for the Rajasthan pre-seed startup grant

1. Register your startup on iStart Rajasthan at istart.rajasthan.gov.in. Registration is the precondition for every benefit under the policy, and nothing can be applied for until it is done.
2. Complete the entity profile with your certificate of incorporation or registration, PAN, founder details and shareholding. Where you intend to claim the women-led top-up, record the women founders' shareholding here.
3. Apply for the Ideation Grant under the pre-seed stage schemes on the platform, attaching your pitch deck or concept note setting out the innovation and the scalability of the model.
4. Correct and complete the application if the platform flags gaps. The department's own procedure note for its funding instruments states that on completion and correction of the application, the startup is invited to present.
5. Present the idea or project before the Evaluation Committee. This is the stage at which the grant is actually decided.
6. On approval, the nodal institution approves and disburses the funds within the stipulated time, into the startup entity's bank account.

What happens after the pre-seed grant?

The Rajasthan Startup Policy 2022 sets out a staged ladder, and knowing what comes next helps a founder plan rather than treat the Ideation Grant as the whole opportunity.

• Viability Grant, seed stage. Available to registered seed stage startups. The policy page states that eligibility and the provision for this incentive will be notified by the government from time to time, so the amount is not fixed on the public page.
• Scale Up Fund, growth stage. Financial support of up to a maximum of 50 percent of the total amount raised by the startup, provided as debt convertible to grant.
• Startup Equity Fund, growth stage. The government has established an Alternative Investment Fund that matches capital raised by eligible growth stage startups, capped at INR 5 crore per startup. A startup may choose either the Startup Equity Fund or the Scale Up Fund.

Alongside these, DoIT&C runs instruments carried over from the earlier policy framework, including a sustenance allowance of Rs 10,000 per month for one year to eligible startups at idea or prototype stage after approval by the committee and the nodal institution, and marketing and commercialisation assistance of up to Rs 10 lakh at Minimum Viable Product stage.

What non-cash support comes with iStart registration?

The state's incubation infrastructure is available to registered startups and is worth as much as a small grant to an early team.

• iStart Nest, the government's incubation centre, which the department describes as the only centralised incubator in the country providing free incubation to emerging startups, with mentor engagement, rapid iteration cycles and fundraising preparation.
• Incubation centres operating in Jaipur, Kota, Udaipur and Bharatpur, through which iStart records having supported more than 650 startups.
• Techno Hub, the state's large startup hub, offering free space, connectivity, easier funding, mentorship and exposure.
• A virtual incubation programme for startups from early to scaling stage across the state.

Common reasons a pre-seed grant application does not go through

• iStart registration incomplete, so the application never reaches the committee.
• Entity does not fit the legal forms, a sole proprietorship, for example, is not one of the three accepted structures.
• Entity formed by splitting or reconstructing an existing business, which is expressly outside the startup definition.
• Stage mismatch. A company already in market applying for a pre-seed grant will be routed to a later-stage instrument instead.
• Weak concept note, where the innovation or the scalability is not demonstrated to the Evaluation Committee.
• Women-led top-up claimed without proof that more than 50 percent of founders are women.

Help and contact

• Email: startups.doit@rajasthan.gov.in
• iStart help desk: 0141-2929831
• Platform: istart.rajasthan.gov.in
• Department: Department of Information Technology and Communication, Government of Rajasthan

There is no application fee for iStart registration or for the Ideation Grant, and no consultant is required to file it. A demand for payment to "get your grant approved" should be reported to the help desk above.