The EIC Accelerator: Grant vs. Blended Financing (Equity) Posted on March 20, 2020October 14, 2020 By Stephan Segler, Ph.D. Here are the answers to some frequently asked questions regarding the equity financing option of the EU’s start-up grant (SME Instrument, EIC Accelerator). The EIC Accelerator offers the application for either a pure grant or blended finance (a mix between a grant and equity-based financing). While the application and reviewing process for both options is the same, the financing for the grant (€2.5m) and for the equity contribution (€15m) originate from different sources so the criteria for a successful proposal are also slightly different. While the grant is requested as is, the equity financing is based on an “offer” whereas the proposal details the overall equity contribution requested and presents an offer regarding the company shares which are provided in exchange. As such, the equity contribution requires more information compared to a simple grant application and the major points to consider are: Amount of Ownership Offered: The guidelines suggest to offer a minority ownership of at least 10% and up to 25%. Exit Strategy: There is a specific section in the proposal which asks you to describe your exit strategy or your plans for the company once it has been scaled. The EU is looking at 7-10 year time frames regarding the ROI with a maximum of 15 years. Exit strategies can be buyouts, IPO’s, liquidations, etc. Company Valuation over Time: You are asked to describe the progression of your company valuation using past data and your future projections, including the reasoning behind them. No revenues and non-bankable: The equity contribution is directed at high-risk companies with limited or no turnover and negative EBITDA’s. This usually excludes profitable companies which are only seeking scaling support and rather targets research-heavy projects. It also defines high-risk businesses as having no interest from the market or investors just yet. TRL9 activities: The equity financing is exclusively targeted towards Technology Readiness Level 9 (TRL9) activities which relate to market deployment as opposed to technical developments. This, in turn, means that if a grant is requested for activities related to product deployment and marketing then this will either be ineligible or will be transferred to equity financing. There are some other minor things to consider when applying for equity financing but the points above cover the most important parts. This article was last modified on Oct 14, 2020 @ 12:39 These tips are not only useful for European startups, professional writers, consultants and Small and Medium-Sized Enterprises (SME) but are generally recommended when writing a business plan or investor documents. Deadlines: Post-Horizon 2020, the EIC Accelerator accepts Step 1 submissions now while the deadlines for the full applications (Step 2) under Horizon Europe are: Step 1 Open now: Apply as soon as possible to be eligible for the next Step 2 submission deadline Step 2 (closing 17:00 Brussels Time) 1st cut-off 2025: - 2nd cut-off 2025: March 12th 2025 3rd cut-off 2025: - 4th cut-off 2025: October 1st 2025 Step 3 4th cut-off 2024: January 13th to 17th 2025 1st cut-off 2025: TBD 2nd cut-off 2025: TBD 3rd cut-off 2025: TBD 4th cut-off 2025: TBD The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing. Contact: You can reach out to us via this contact form to work with a professional consultant. EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only). Any more questions? View the Frequently Asked Questions (FAQ) section. Want to see all articles? They can be found here. For Updates: Join this Newsletter! by Stephan Segler, PhDProfessional Grant Consultant at Segler Consulting General information on the EIC Accelerator template, professional grant writing and how to prepare a successful application can be found in the following articles: A Quick FTO Guide for EIC Accelerator Applicants in a Rush 2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator Developing the Unique Selling Points (USP) for the EIC Accelerator Explaining the Resubmission Process for the EIC Accelerator A Short but Comprehensive Explanation of the EIC Accelerator EIC Accelerator Success Cases Deciding Between EIC Pathfinder, Transition and Accelerator A Winning Candidate for the EIC Accelerator EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1) EIC Accelerator Horizon 2020 Phase 2 SME Instrument / EIC Accelerator EIC Accelerator equityEIC Accelerator financingEIC Accelerator grantIndustries & CompaniesInvestorsSME Instrument Phase 1Timelinetip#19
EIC Accelerator Tips to Quickly Improve Grant Writing (EIC Accelerator, SME Instrument) Posted on January 4, 2021December 30, 2020 Writing an EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity financing) application can be difficult for startups and Small- and Medium-Sized Enterprises (SME) (read: Writing Internally). This can be due to a variety of factors such as a lack of grant writing experience, an absent business… Read More
EIC Accelerator The New EIC Ecosystem, Fast-Track and Pilot Plug-In Schemes (2023 EIC Accelerator Work Programme Part 8) Posted on November 5, 2022November 5, 2022 The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter… Read More
EIC Accelerator The EIC Accelerator Grant Consulting Industry (SME Instrument) Posted on February 11, 2021February 4, 2021 In order to apply to the EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity financing), many startups and Small- and Medium-Sized Enterprises (SME) are looking for expert consultancies or professional writers to facilitate the ever more complex evaluation process (read: Proposed 2021 Application Process). Navigating the… Read More