Wednesday, March 30, 2016

FAQ by DIPP on Role of Incubators of Startups India

As published earlier the frequently asked questions on General aspect of startups India by Department of Industrial Production & Promotion (DIPP) , here are the answers to FAQs related to Incubators providing Recommendation/ Support/ Endorsement Letter to Startups. Readers must note that there is plan for a startup corridor for incubator also .

Which incubators are authorized to
provide a recommendation/ support/
endorsement letter?
As per the notification no. G.S.R 180(E) dated February 17, 2016, an incubator must fall in one of the
following categories to be authorized to provide a recommendation/ support/ endorsement letter to an entity:
a)   Incubator established in a post-graduate college in India
b)   Incubator funded by Government of India or any State Government as part of any specified scheme to promote innovation
c)   Incubator recognized by Government of India

With regards to (c), an incubator shall be recognized by DIPP on application.
Our incubator does not feature in the
list(s) of incubators published on Startup India portal. How can we get it included in the list(s)?
In such cases, you can make an application at Startup India portal.

Once an  incubator application is  found  eligible, the  name of  the  incubator shall be  included in  the appropriate list(s) by DIPP.
What are the aspects that need to be
reviewed before issuing a recommendation/ support/ endorsement letter?
An incubator is required to validate if the entity under review is working towards innovation, development,
deployment  or  commercialization  of  new  products,  processes  or  services  driven  by  technology  or intellectual property if it aims to develop and commercialize:
a)   A new product or service or process; OR
b)   A  significantly improved existing product or  service or  process that  will  create or  add  value for customers or workflow.

The  following  activities  are  not  considered as  a  valid  case  for  issuing  a  recommendation/ support/
endorsement letter:
a)   Products or services or processes which do not have potential for commercialization; OR
b)   Undifferentiated products or services or processes; OR
c)   Products or services or processes with no or limited incremental value for customers or workflow.
Is there any specific format in which an
incubator would be required to provide recommendation?
Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup
India portal.
Is there any prescribed fee(s) that can be charged from the Startups for providing
them with a recommendation/ support/
endorsement letter?
No fee is prescribed by the Government. However, the incubators may considering the efforts involved in the process charge a fee.

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Can we recommend/ endorse an idea that
has not been incubated at our incubator?
Yes. An incubator featured in any of the lists on Startup India portal, can endorse an idea/ Startup not
incubated in such incubator. The objective of the recommendation is to validate that a Startup is involved in an eligible business.
Do we need to designate someone to
sign/ issue the recommendation/
endorsement letter?
An  incubator  is  encouraged  to  designate  its  officer(s)  to  sign/  issue  the  recommendation/ support/
endorsement letter to entities, and share the same with DIPP.
What process needs to be followed for receiving applications from entities not
incubated at our incubator?
There is no prescribed format for receipt of application. It is expected that incubator will capture the process and innovative nature of business before making a recommendation.
Who will upload the recommendation/
support/ endorsement letter on the
Startup India portal and mobile app?
The entity receiving the recommendation/ support/ endorsement letter will upload the relevant documents
at the time of applying for recognition.
Is there any liability on a recommender/
Where a recommendation is issued by an incubator without proper examination or without itself satisfying
about the innovative nature of the business it shall be blacklisted from giving any future recommendation or receiving any benefit from  Government. Any such action shall, however, be taken only after a  due opportunity is given to the incubator.

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