Grant

A grant is a financial award made to a startup or individual by a government agency, public institution, or foundation to support a specific objective — such as research, product development, job creation, or market entry. Unlike a loan, a grant does not carry repayment obligations. Unlike equity investment, it requires no ownership stake in exchange.

In India, grants form a central pillar of the government's startup support architecture. Schemes administered through bodies such as DPIIT, SIDBI, DST, MeitY, and various state governments offer grants to early-stage startups meeting defined eligibility criteria. These grants are often tied to milestones — a portion is released on application approval, and subsequent tranches are unlocked only when verified achievements are submitted.

Grants are not free money without obligations. Recipients typically must: spend funds only on approved categories (salaries, prototyping, IP filing, etc.), maintain accounts and submit utilisation certificates, undergo periodic audits, and in some cases repay if conditions are violated. Misuse or non-compliance can result in recovery of disbursed amounts.

For a founder, a grant is most valuable when it funds activities that are commercially necessary but hard to justify to an equity investor — basic research, compliance infrastructure, or market feasibility studies. Because it does not dilute the cap table, it is often worth pursuing even if the application process is time-consuming.