Sidbi - Early Stage

Start up finance scheme MSMEs (SAS)

Scheme objective To provide structured financing to startups and early stage enterprises with a focus on innovative new economy businesses which are not able to raise funds from existing banking system due to lack of assets & collaterals and which are too “early stage” and small to elicit serious investment interest from bigger private equity players. Eligibility of customers o New MSME businesses set up by promoters with experience of atleast 5 years in the same line. o Early stage MSME units where revenue streams have commenced and which should have break even potential in near future. Quantum of assistance/ eligible project heads Upto 80% of the project cost which could include Capex & Intangible heads, WC/WC margin, Pre-operative expenses, IDC, Contingencies, any other head required for the project.

Facility details  Optionally Convertible debt with tenure of upto 8 years (flexible structuring possible) including principal moratorium of 2-4 years. SIDBI will have following rights in case a new institutional investor (VC fund, equity fund, etc) comes in the company in future or in case of an IPO: o to convert the assistance to equity at a pre-decided discount to the new investor. o to invest further amount in the company at the same terms as the new investor. o to convert at discount in case of IPO plans.  Any other mezzanine structure suited to the business model and cash flows of the company could also be used.  Return expectation would be higher than secured debt but lower than private equity. The coupon rate on instruments could be structured flexibly in tune with company’s cash flows.  No asset coverage norms or collateral requirements. While first charge on assets of the company could be taken, the same could be subordinated in case secured lender is involved in the project or comes in later. Personal guarantees of promoters would be insisted to required to ensure their stake in the project. Expectation from entrepreneurs 

Entrepreneurs would be expected to be fully committed to their ventures and devote full time on the same.

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Entrepreneurs would implement corporate governance programme to be offered along with the assistance by SIDBI. They would be expected to Implement transparent systems & processes in the enterprise for critical decision taking Ensure compliance with all statutory and legal requirements reqd for the business. Entrepreneurs would provide regular & transparent information to SIDBI regarding project progress viz. agreed milestones and any other relevant information/returns required by SIDBI. Information to be submitted for seeking Inprinciple approval Under Start Up Assistance Scheme

Particulars of the enterprise / promoters Name/ Constitution Date of incorporation/ Commencement of business Location of office and factory / works Industry / Product details –Proposed Detailed Promoters background, Bio Data and Past experience. (Pl attach detailed CVs of all promoters) Present MSME status Micro/ Small/ Medium enterprise (Manufacturing/ Service sector) A brief note on Present Financials (Pl attach audited past financials) Banking Relationships Bank Facil Securit Amt. Amt. Amt. Amt. of the Unit / Group ity ies Sanc Disb O/s Disb concerns Type offered Project Project genesis and details Present scale of operations and the purpose of proposed investment Venture outlay Capital requirement (with break-up) : Sources of Finance (with break-up) :

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Assistance sought

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A brief of Implementation and Milestones achievement plan Projections (Rs lakh)

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Risk capital assistance and nature of instrument : Assistance sought under any other scheme (DCS etc) :

Sales PAT Net worth C . 1 2 3

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Technology USP of Technology, process or product / service. Innovation, R & D, product development aspects. External validation of unconventional technology, process, product / service if applicable. Market Names of existing Customers and value of products/ services offered, if any. Proposed Customers and products/ services to be offered Market Need identification, Opportunities and the Market fit of proposed solutions Marketing strategy and Selling arrangements (existing and proposed) Major competitors Business Scalability potential Whether the business model envisages for creation of value by way

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of intellectual property, patents, copyright, brands, etc. G SWOT Analysis . H Key risk factors and . Mitigation I. Exit options proposed by the enterprise and expected return to SIDBI J. Professional References K Any other relevant . information

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Format of Bio Data of the Promoters / Key Professionals Name

Date of Birth

Father’s Name Address & Contact Details Major Skills / Area of Expertise Details of Past Experience of Entrepreneurship Professional Experience Details (Pl furnish Organization-wise)

Name of the Organization Designation Association during (period) Key Responsibilities Key Achievements Relevance to the proposed business Educational Qualifications (Pl. furnish graduation onwards)

Name of the Course Specialisation, if any University / Institution Practicals / Applications Relevance to the present Business Certifications / Memberships#

Name of the Certification Validity Relevance to the present Business

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References

Name, Address and contact details Designation of the reference Association since Nature of Association Functional responsibility in the proposed venture Relationship with Chief Promoter

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Note : 1. # Only professional / technical certifications / memberships to be mentioned. 2. Please attach copies of testimonials in support of professional achievements / certifications / memberships. 3. Please give complete details of the information and add additional space wherever required.

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