Assessing an EIC Accelerator Applicant for Innovation, Traction and the Team (SME Instrument) – Part 1

When developing a project for an EIC Accelerator grant or equity application (formerly SME Instrument Phase 2), it is often useful for professional writers and consultants to look at certain key areas in order to obtain a fast overview of the project’s quality.

There are many sub-criteria to be analyzed that help in gaining a thorough understanding of a project but, for a rapid screening, a few core areas are sufficient to focus on. While consultants could break such an assessment down in a variety of ways based on professional preferences, the following presents a useful method to qualify prospect EIC Accelerator grant applicants in order to estimate their success chances:

  1. Innovation – this article
  2. Traction – read: Part 2
  3. Team – read: Part 3

1. Innovation

The term innovation, in and of itself, is supposed to give an answer to the question “Is the product or service unique and new?”. The innovative nature of the project is a key aspect of the EIC Accelerator which, since it is managed by the European Innovation Council (EIC), has placed “Innovation” at the core of its mission statement.

The EIC does not merely fund great businesses or supports European companies just based on their location but is explicitly targeting market disrupting and market-creating companies with the goal of supporting future European unicorns, i.e. companies valued at €1 billion+.

In order to fully assess such a project, looking at the innovation has to always come first and precede the assessment of any other segment. As an example, useful subsegments to further elaborate on the innovative nature of a project can be:

1.1 The Origin of the Innovation

From experience, most innovative companies are directly coming from two main subsegments which are:

A – The technical side (i.e. a university spin-off, technical experience, etc.) which means that they are close to cutting-edge Research & Development which makes them uniquely positioned to exploit the opportunity or

B – The industry-side through close relationships to stakeholders and industry players who are directly suffering from the customer pain point and are openly seeking a solution.

These two subsegments are not perfectly separated but often exhibit a strong overlap. In general, all types of innovations will at least fall into one of these two sub-categories. The origin of the innovation will very often give the professional writer or consultant an idea of its quality and, if analyzed thoroughly, can make an EIC Accelerator grant award much more likely.

1.2 Relationships Between the Innovation and the Customer Pain Points

Understanding that not every innovation is actually worth any kind of revenue is an important first step in investigating an EIC Accelerator project. A product or service can be highly innovative but it might not be easier to use or lower in costs compared to market alternatives which begs the question, “Why would a customer want this innovation?”.

There are plenty of examples of things that are different but not needed and can be described as an unwanted innovation. In order to avoid this, the assessment of a startup or Small and Medium-Sized Enterprise (SME) should include the relationship between the customer pain points, the Unique Selling Points (USP) of the innovation and the key technological features of the product or service.

This relationship will immediately tell the consultant or professional writer if an innovation is suitable for the EIC Accelerator grant financing or not since the official EIC template heavily screens for innovative and profitable projects.

1.3 The Intellectual Property Rights (IPR) Status of the Innovation

Just like the innovative nature of a project, the IPR status can be a useful way to identify its core aspects but, in the same fashion, IPR does not equate innovation from an investors perspective. Patents can be very broad and can be filed for minuscule inventive steps that might not properly protect the market introduction of a certain product.

Just because something has been patented does not mean that the innovation assessment will be high by default. The IPR should only be the tip of the iceberg after the proposal has already explained how the innovation directly addresses the customer needs and is substantially better than any other market alternatives.

IPR should also not be viewed as the ultimate innovation proof since some innovations are better protected through secrecy because a patent, in and of itself, could already give the competition too much information and jeopardize the startup’s success.

1.4 The Barrier for Competitors to Copy the Innovation

Lastly, one key part of assessing if an innovation is suitable for substantial investments under the EIC Accelerator is its protection from a technological side. Having an innovation that is easy to copy will always reduce the success chances of the resulting evaluation process since the core barriers for all potential me-too competitors has to be addressed convincingly.

When a company like Facebook launched a successful social network, many other companies were aiming to replicate this success and, in order to persevere, the original company must have had clear barriers in place to protect its position on the top.

Such barriers can be in the form of know-how, proprietary methods, IPR, a head start or commercial factors such as industry relationships, customer interest, exclusivity agreements, etc.

Summary

Assessing the innovation of a prospect EIC Accelerator applicant is key for professional writers and grant consultants in preparing a competitive proposal and increasing its success chances significantly. The main criteria to assess a project’s innovation and to ensure a positive evaluation are:

  • The origin of the innovation (technical- & industry-side)
  • Solving a customer pain point
  • Intellectual Property Rights (IPR)
  • Barriers to entry

Part 2 (Traction) and Part 3 (Team) of this article can be found under the provided links.

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) will be on June 16th 2021 and October 6th 2021 under Horizon Europe. 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.

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by Stephan Segler, PhD
Professional 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: