Category Archives: Horizon 2020

EIC Accelerator, Horizon 2020, Horizon Europe, SME Instrument / EIC Accelerator

Steering the EIC Accelerator: Lessons Learned from the Pilot Program

The EIC Accelerator funding (with blended financing option) by the European Innovation Council (EIC) and European Commission (EC) is providing startups and Small- and Medium-Sized Enterprises (SME) with up to €2.5 million in grants and €15 million in equity financing per project (€17.5 million total).

The program is often supported by professional writers, freelancers or consultants to navigate the complex proposal template and EIC requirements.

This article presents a summary of the 2022 EIC Accelerator report and is discussing insights regarding the success of the pilot program leading up to 2020.

Note: An explanation of the EIC Accelerator terminology can be found here: Explaining the EIC Accelerator.

1. The EIC Fund

1.1 Delays

“It needs to considerably speed up the process leading to the signature of the financing agreement. In the pilot phase, delays were due to the novelty of the instrument, both for the EC and the beneficiaries, whereas in the current programming period there were legal difficulties in transitioning the Fund under Horizon Europe.”

The current status of the EIC Fund, with all its troubles and delays, is on display in a recent 2022 impact report on the EIC Accelerator (see How Deep Is Your Tech?), the EC website (here) and in a recent media article (here). While over 90 investment decisions have been made, the funding has not reached the bank accounts of beneficiaries in most cases.

While grant payments have been made effectively, albeit with some delays, the equity investments have been hampered, likely due to a combination of structural difficulties and the inexperience encountered by the EU operatives.

Of course, including the beneficiaries as a reason for the delays is not entirely accurate since the delays were caused by the EIC, primarily.

1.2 Communication

“Stakeholders’ expectations about the benefits and implications of receiving the Fund’s support could be managed by further communication through national contact points, SME and start-up associations.”

The EIC has historically struggled with properly communicating what the EIC Accelerator is seeking and what applicants should expect. This is likely due to the nature of public institutions that often prioritize political agendas and communications over clear and pragmatic advice.

As an example, it is in the interest of the EIC to communicate how it funds disruptive innovations that the private market is ignoring but it is not in their interest to admit that the evaluation process often prioritizes low-risk investments, even going as far as giving grants to companies that received €20M+ from private markets just days before (see Breaking the Rules).

The EIC has even listed a portfolio company as an example of a supported centaur (i.e. €100M+ valuation) even though the company likely had this status before the EIC funding was obtained, according to public data.

Since the EIC has encountered difficulties in clearly communicating with future applicants, likely due to potential conflicts with political appearances, it is increasing its reliance on National Contact Points (NCP). The EIC has already made data sharing on the platform mandatory for all applicants and NCP’s often have access to beneficiary lists before results are officially published.

To communicate more clearly, the EIC should publish detailed but anonymous information regarding the rejection reasons of applicants especially in the interview stage. If the evaluation process is in fact consistent, then it should be possible to give superior guidance directly.

As an example, if companies are rejected because of their small teams, then there should be a clear cut-off that applies to all companies. If a company is rejected because they have raised €15 million just before the interview, then this should be consistent among applicants as well.

1.3 Conflicting Agendas

“A contentious point on the Fund structure pivots around the interpretation of two eligibility rules: non-bankability and co-investment. The two criteria respond to the need to identify investment-worthy projects with traction from private investment, but that cannot be financed through traditional debt instruments. The first criterion addresses the lack of additionality observed in the SMEI and reflects the need to ensure that the Fund is not competing with the market by supporting projects that financial intermediaries could have financed. The second criterion ensures that market players do not see the recipient companies as publicly subsidised entities. It also guarantees that the European Commission remains a dormant investor in the company, till it may exit, due to the entrance of new investors.”

In the previous EIC Accelerator pilot phase, the non-bankability criterion was still present but it has now been removed from both the official EIC Work Programme and from the evaluation criteria. The term was used to refer to companies that cannot receive funding from private sources such as banks or institutional investors since they are too high risk.

Regardless, the current proposal template is still asking all applicants to explain why they need funding from the EIC which is consistent with the removed non-bankability rule.

The independent report points out that forcing companies to obtain co-investments for the EIC Fund on their own opposes the narrative of being solely dependent on the EIC. Upon closer investigation, there is a narrow role for the EIC to play even if a company is non-bankable since the grant and equity components can de-risk the project for outside investors.

In reality, the EIC has not honored that role and, by diluting the non-bankability criterion, has allowed itself to provide grants for companies that have easy access to private capital (see Investing in Well-Funded Companies).

It is interesting to see that the independent investigators were able to predict such an outcome based on 2020 data. The EIC had to decide between risk (non-bankability) and success (co-financing, private investor interest) and it chose the latter.

2. Gender

2.1 Changing the Goal to Reach the Goal

“The EIC Pilot has made commendable efforts in trying to achieve more balanced participation, especially for women.”

The EIC has set mandatory targets for female participation in the EIC Accelerator even during its pilot period but it is unclear to which degree they have increased the number of female-led applicants as opposed to the number of female-led winners.

In 2020 and prior, the EIC used different thresholds for male and female participants which effectively increased the difficulty for male while reducing the difficulty for female CEO’s. The EIC has further loosened its criteria on what a female-led company means and expanded the definition to also include CTO and CSO positions instead of just the CEO position.

This is an interesting development since changing the definition of the goal is not the same as reaching the goal.

It is also unclear if such outcome-driven goals will benefit future female founders or if they create the wrong incentives and hurt the long-term diversity of the ecosystem.

Increasing the number of applicants from widening countries and the number of applying female CEO’s could be a more sustainable option rather than changing the definition of the goal or forcing certain outcomes. Additionally, the EIC could subsidize consulting fee’s for female CEO’s or implement similar programs to encourage an increase in applicants instead of distorting evaluation criteria.

2.2 Eroding DeepTech

“Nevertheless, identifying attraction and inclusiveness as the programme’s KPIs creates possible conflicts with the award criteria for project selection and in particular with excellence in science and innovation.”

Interestingly, the above quote from the independent report was given twice in the document, verbatim. It highlights the general conflict of impact investments or Environmental, social, and corporate governance (ESG) policies since they can erode investment decisions.

Investors generally have to prioritize profits and shareholder value but introducing an additional target can jeopardize such priorities. This is true for both the focus on DeepTech and gender targets since they present impacts outside of financial success.

For the EIC, it is unavoidable to have such conflicts since it is not a typical investor but focuses on difficult-to-finance and high-impact DeepTech projects. As such, profits are already being jeopardized.

Introducing gender targets to this equation is further eroding potential profits since it presents additional restrictions on investment decisions.

In the end, something will have to give since the EIC must now:

  1. Maximize success for political appearances (i.e. unicorns, centaurs, follow-up funding)
  2. Focus on high-risk DeepTech
  3. Increase female participation

Of these three targets, the second goal of high-risk DeepTech investments is the most endangered since it is very easy to sweep inconsistencies under the rug (i.e. Breaking the Rules) while advertising success and diversity.

This has already been predicted by the independent report based on 2020 data from the EIC Accelerator Pilot.

Ironically, the incentives created by the EIC might hurt the DeepTech ecosystem in the long term because it is unlikely that any institutional investor will take more risks than the EIC. If the EIC Fund avoids high-risk projects to prioritize diversity and fast success then it might send the wrong signals to private markets.

This would render the advertised €2.6 of private capital for every €1 invested by the EIC a crowding-out of innovation funds into regular investments rather than a crowding-in of private capital into high-risk DeepTech.

3. Industries

The projects funded under the EIC Accelerator Pilot are aligned with the general focus on technology-driven projects with strong representations of optics, robotics, energy, health and climate tech.

4. Evaluation

4.1 Luck and Randomness

“The outcomes of the evaluation process were often unpredictable, especially for the Accelerator. In interviews, participants reported a sense of randomness in project selection. Some beneficiaries reported that it was possible to succeed with a resubmitted proposal including minimal or no changes at all. This fact has somehow undermined the credibility of the evaluation process and created a sense of haphazardness in project selection where the “luck factor” determined the difference between a selected and a non-selected high-quality proposal. Feedback provided by the evaluators was not considered sufficient to improve rejected proposals. At the same time, case study feedback on the jury panel was mixed. Whereas in some instances, the selected teams were impressed by the competence of the jury members, in other cases, they were left disappointed by the insufficient understanding of the more technical aspects.”

Unfortunately, the luck factor and randomness in the evaluation process have remained intact throughout the entire EIC Accelerator program. It is still a reality that companies are rejected or funded with inconsistent feedback. A company can be rejected because it raised €10 million in funding while a company can be funded even though it just raised €30 million.

Since there is no accountability for the EIC regarding the consistency of the process and the rejected applicants are generally not incentivized to make their rejections public, it is often only consultancies and professional writers who collect such case studies.

Still, the feedback from evaluators has greatly improved after 2020 and it is a positive sign that the EIC is rising to the ambitious challenge of reinventing itself.

4.2 Third Time’s a Charm

“In the case studies, 9 of the 15 projects analysed required 3 to 5 attempts before being funded. Similar feedback was also collected through the survey and the interview programme.”

The current evaluation process is restricting re-submissions but, back in 2020, it was still possible to re-submit proposals indefinitely. Even though the evaluation process has changed dramatically since 2021, it is still a reality that funded projects will encounter rejections along the way.

Considering that the majority of projects required 3 to 5 submissions means that the process is too random to deliver consistent and desirable results. Unfortunately, this likewise means that there are many projects that are eligible for funding but were unlucky in the evaluator or jury selections.

The EIC could aim to mitigate such issues if they were to assess which evaluators and jury members provided wrong assessments.

As an example, a NO GO grading by an evaluator in Step 1 or Step 2 for a project that would succeed in Step 3 can be represented as a strike for that evaluator. In the same way, a GO grading for a project that would be rejected twice in the interview can likewise be represented as a strike.

The same can be implemented for individual jury members who reject a project in the first interview which is then funded in the second interview with no meaningful changes.

This would allow a degree of communication between the Step 1 and 2 remote evaluators and the Step 3 jury members who have very different backgrounds and funding criteria.

There should likewise be a degree of consistency among all evaluation steps regarding rejection reasons. If a company is rejected for a specific factor then the evaluators and jury cannot fund projects that exhibit the same factor (i.e. team size, amount of funding, etc.).

This would reduce the luck factor.

4.3 High-Risk, Low-Reward

“Low success rates were not commensurate with the efforts required by the application process. Oversubscription was driven by the programme’s success and popularity, but also by a large number of re-submissions, with more than one out of 10 applicants applying more than five times between 2018 and 2020. Two-thirds of the Accelerator participants were successful at their first, second or third submission.”

Figure: Funded applicants that had to submit multiple times.

Since resubmissions have now been restricted, this graphic is generally cut after the first two attempts which shows that there are likely a variety of eligible applicants that are being rejected. This is aggravated by the tendency of most companies to lose interest over time which leads to an even higher number of companies that could have been funded with more persistence.

4.4 A Fair Lottery

“The fully-fledged EIC has significantly improved the EIC application process. According to [consultants], the new application system saves considerable time and effort for both the implementing agency and the applicants. Moreover, the new system is likely to favour the best applicants by reducing the “noise” of unsuitable applications that also contributed to reducing the programme attractiveness by keeping unnecessarily low success rates.”

The confirmation by consultants that the application process saves time is quite odd since the system established in 2021 is significantly longer and requires more effort than the 2020 system. It has increased the reliance of applicants on consultants greatly since the time to prepare an application now takes multiple months instead of weeks.

While success rates started out higher than in 2020, they are gradually falling and have recently fallen below 5%, thereby reaching similarly low levels compared to the old system. Over time, the success rates might become as competitive as the previous EIC Accelerator Pilot.

4.5 The Pitch

“Finally, success in the interview requires personal skills (e.g., English fluency, presentation and communication skills) that are difficult to acquire in a short time.”

There is likewise a strong likeability factor in the interviews where the interviewers will be more inclined to fund a project if they like the team. Agreeable and friendly speakers are often favored over disagreeable speakers which is rather unfortunate since many of the great entrepreneurs of our era, if not all, were highly disagreeable (see EIC Accelerator Interview Preparation).

5. Pay-to-Play

“More than 70% of survey respondents stated that they hired a consultant to prepare an application for the EIC.”

The EIC Accelerator is time-consuming, complex and obscure. Applicants generally start by reading the official EIC communications but, due to their focus on promotional materials, this often leads prospective applicants to have more questions than answers.

Unfortunately, this fact can also be exploited by consultancies since many applicants are greatly overestimating their chances of success based on their review of the EIC guidelines regarding innovation, high risk, a lack of funding and DeepTech definitions.

6. The Reality

6.1 Does the EIC Accelerator Work At All?

“The majority of Accelerator projects included in the case studies showed progress with their core technology assets but with no evidence yet of scaling up. At the time this evaluation was carried out, almost all projects achieved a TRL between 8 and 9. Two projects were expected to licence production and four to achieve production on a larger scale.”

The EIC Accelerator is designed for the purpose of scaling up disruptive innovations. The guidelines are clear in that TRL8 has to be reached after a grant project and an equity injection should propel the project to TRL9 (see Technology Readiness Levels).

Defining the TRL’s is often very subjective but if, after 2 years, no evidence of scaling has been observed then this could be a negative sign.

“Case study analysis showed that projects progressed in upgrading and improving their core technology assets, but there is no evidence yet on commercialisation, although some companies reported that they were ready to scale up production and staff or to licence production.”

In contrast, this lack of scaling is likely a positive as opposed to a negative result since it shows that these projects are, in fact, difficult to execute and require extensive development times. If the EIC Accelerator funds high-risk and disruptive innovations then this is exactly the result one would expect. Most DeepTech projects cannot be completed in 2 years which is why they are called DeepTech.

DeepTech will require more time than a SaaS business that can scale vertically in a matter of months. What is ironic is that this lack of scaling is seen as negative while it should be viewed as a good first step since the TRL8 levels were effectively reached.

The EIC generally expects 2-year projects but this should not be the norm. It should be aware that DeepTech projects can take 5 years to reach TRL9 and should inform the jury and remote evaluators that the length of the project should have no impact on the evaluation, especially in the final interview.

Now, the EIC has 2 general options:

(1) Improve their support for commercialization such as custom business coaches who are industry authorities, helping companies to gain more customers at TRL6-7 and adjusting the EIC communication to focus on commercial/scaling strategies and not on vague concepts such as disruption, innovation and diversity which are not helping companies to succeed.

(2) Abandon DeepTech investments and fund companies that are already scaling to gain success cases quickly.

Unfortunately, it seems like the EIC is gradually moving toward the second option.

6.2 Do EIC Portfolio Companies Grow?

“Based on Dealroom data, in July 2021, 27 Accelerator beneficiaries reached a valuation of more than €100M. They represent 7% of the sample on which data are available in Dealroom (N=410) and 4% of all Accelerator beneficiaries (N=768).”

Such a result should not be negatively assessed. EIC Accelerator beneficiaries can have valuations as low as €1 million at TRL6 since there are few restrictions regarding the project maturity, company age and team size.

“Around 30% of the companies receiving a grant in 2018 saw their employees grow, on average, at a rate above 20% in the three following years”

The problem with any KPI introduced by the EIC is that it will become the focus irrespective of the EIC’s mission. Diversity, gender ratios, valuations, global scaling and similar metrics are all used by the EIC to assess companies but this will, in the long term, only encourage the evaluators to select companies that already score high in these areas instead of helping SME’s to reach that target or to foster innovation.

KPI’s are important but they need to be part of the project execution (i.e. actively supporting business growth) rather than the application process since it will otherwise exclude many startup companies that are genuinely at TRL6 rather than TRL8-9 companies pretending to be.

6.3 Are the EIC Accelerator and the EIC Fund Actually Supporting DeepTech?

“Literature shows that deep tech VCs need to work with a 10-15-year lifetime investment. The profitability of equity investments also tends to be negative in the first years (generally up to five) because the investee company is not able to yield a positive return.”

The romance of DeepTech is well presented by the EIC through unicorns (€1 billion valuation), centaurs (€100 million valuation), disruption and events where much is said about innovation but the reality looks different.

Disruption starts at a point where very few, if anyone at all, can see the vision or wants to invest. If they do recognize a superstar in the making and want to invest, they usually do so with smaller amounts since the risk remains too high.

Peter Thiel saw the immense potential of Facebook in 2004 but only invested $500,000 into the company regardless. He understood that success will take more validation and he can always invest more later.

Negative profits for 5 years are to be expected in DeepTech but the EIC’s selection criteria seem to favor commercial success more and more after every submission cycle. Even the mandatory financial template that the EIC uses only accounts for 5 years of predictions.

According to DeepTech literature, no company should break even during this time but the EIC Jury would not fund such companies.

It would be beneficial for applicants if the EIC would publish statistics regarding the financials submitted by EIC beneficiaries and provide information regarding break-even-points, annual growth rates, start-end-revenues and margins to assess what the EIC is looking for and how much DeepTech they are comfortable with.

6.4 What Happens To Rejectees?

“Around 60% of high-scoring declined Accelerator proposals were implemented at a smaller scale, with less substantial results and benefits, resorting to private financing (business angels, friends or family, or venture capital investors) or a combination of private and public funds. The absence of alternative forms of funding is the most common reason why declined proposals were not implemented.”

This is quite interesting since it demonstrates that there is a role to play for the EIC and that even the high-scoring companies (i.e. above the funding threshold but rejected) will struggle to attract financing and are therefore truly non-bankable.

Through the EIC Fund and its pressure on companies to demonstrate extensive traction (i.e. customers, signed contracts, LOI’s) as well as source co-investors for the EIC Fund even before the project is granted, the EIC is clearly starting to align with private markets rather than the other way around.

One statistic that would be an interesting and insightful addition to this report would be to identify which companies have raised financing right before obtaining the EIC Accelerator grant or those who have been part of a due diligence process leading up to the funding.

Such statistics would reveal the dark number of how many companies could have succeeded without the EIC and can be contrasted to the number of projects that are not implemented without EIC support.

This article was last modified on Apr 17, 2023 @ 19:57

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

Investigating EIC Accelerator Success Rates for Each Stage (SME Instrument)

The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity financing) is undergoing a transformation in 2021 (read: Proposed Evaluation). The former 2-step process (application and pitch interview) which has been active for almost 4 years is gaining a third step (video pitch and mini-application) which can have a variety of effects on its funding thresholds (read: EIC Accelerator Introduction).

The Horizon 2020 Process

In the past, it was clear that Step 1 (long application) was the most difficult stage to pass through with success rates being well below 10% and with many weeks having to be invested in the preparation of the respective documents. On the other hand, Step 2 (pitch interview) was comparatively easy with success rates of approximately 50% and much shorter preparation times.

For startups and Small- and Medium-Sized Enterprises (SME), it was clear that the likelihood of receiving the grant financing improved the further one was in the process since the success rates were increasing for each step. To facilitate the application, many applicants relied on professional writers and consultancies to support them in working with the official proposal template.

In the old evaluation process, the funnel for the selection of EIC Accelerator applicants can be visualised as follows:

Note: 100 Applicants (Y-axis) are chosen as a base and 5 EIC Accelerator winners are selected for the sake of simplicity. The length of Step 1 (X-axis) is twice the length of Step 2 to reflect the amount of effort needed to prepare the documents.

In contrast, the newly introduced third step could change that dynamic since the three steps under Horizon Europe (2021-2027) could have entirely different thresholds. Depending on how these are distributed, it can render the EIC Accelerator an excessive time investment or can make the grant more appealing to startups.

Evaluation Thresholds under Horizon Europe

Based on the European Agency for SME’s (EASME) and the European Innovation Council’s (EIC) decision as to how proposals are scored and ranked as well as how their thresholds are determined, the success chances per step can vary greatly. Unfortunately, there is currently no definite way of predicting if the new Step 1 (the mini-application) will have a high or low success chance compared to Step 2 (the long application).

In the same vein, the interview and pitch evaluations could shift from the past model since performing them remotely presents an opportunity to execute more pitch evaluations at scale to screen companies. This could likewise lower the interview success rates significantly and change the dynamics of the application process (read: Pitch Interview Preparation).

From a participants perspective, the EIC should prioritize matching the effort an SME has to invest in an application with their success chances. This means that having a low-effort application with a high success rate followed by a high-effort application with low success rates would be frustrating for applicants since they will have wasted a lot of time and resources.

The central question is how much effort a rejected applicant had to place into an application and if this effort was proportional to their success chances. If the first two steps have success rates of 90% while the last step has a 5% success chance then the amount of time wasted is enormous. If the first step has a 5% success rate while the remaining steps select 90% of applicants each then this would be time well invested.

Visualising Scenarios

To visualise the difference scenarios, a pyramid-type funnel is used for the selection thresholds of each step. To simplify the representation of such scenarios, the following considerations apply:

  • A 3 Step evaluation is used to select 5 successful beneficiaries from 100 starting applicants. This yields a 5% success rate for the grant.
  • The selection thresholds are chosen as 50% or 20% to account for low- and medium-success stages. 50% * 50% * 20% = 5%
  • Since the effort per evaluation step will vary greatly, the long application in Step 2 is at least twice as difficult as either Step 1 or Step 3. For all 3 Steps, the following effort-relationship is represented on the X-axis: [1-2-1]

The result is the following overview whereas the Y-axis is proportional to the number of applicants and the X-axis corresponds to the effort that is placed into an application. The area of the pyramid represents the number of applicants (Y-axis) weighted by the effort (X-axis) they apply. The more “bulky” a pyramid is, the more time the rejected applicants will waste due to the chosen thresholds.

Analysing the Scenarios

In these three scenarios, it is evident that scenario 3 would be the best for applicants since the first and most selective step will require a low amount of effort. In the same vein, the second scenario is the worst outcome for applicants since they would invest a significant amount of effort into their applications while the chances drop towards the last step.

From the evaluator’s perspective, there is always a trade-off for the simplification of the application documents since an application that is too simple might be unsuitable for a grant selection while an application that is overly complex will waste both the applicant’s and the evaluator’s time.

Nonetheless, the EIC should aim to prioritize scenario 3 since this will greatly reduce the entry barrier for startups whereas they will know, with little effort, if the EIC Accelerator is suitable for them or not.

Unfortunately, the 2021 process will likely follow scenario 1 since it will be a simple extension of the 2020 process with only the addition of another step. This scenario would match the previous process since the 50% rates for Step 1 and 20% for Step 2 yield the combined 10% for the old Step 1.

In addition, the EIC and European Commission (EC) have decided to reintroduce thematic topics which are separate funding arms within the EIC Accelerator and will have different budgets, evaluator pools and levels of competitiveness. This will further increase the overall complexity of the evaluation process and can impact the effort-to-success ratio of each Step’s selection.

Future Predictions

The assumptions for the graphics presented above are limited and are only acting as a way of conceptualising challenges that applicants might face under the future EIC Accelerator.

Another interesting direction the EIC could move towards is the removal of the full application (Step 2) whereas all applicants could directly join a remote evaluation after passing the mini-application in Step 1. This is especially feasible for equity-applicants since the due diligence that follows the successful selection can replace the in-depth financial documentation of Step 2.

This article was last modified on Feb 15, 2021 @ 13:12

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

The UK’s Participation in the EIC Accelerator under Horizon Europe after 2021 (SME Instrument)

The United Kingdom (UK) has officially left the European Union (EU) in February 2020 but their future relationship concerning EU funding programs has been a mystery thus far. Under Horizon 2020, the UK was largely able to participate in funding programs as could all EU-27 and third-country applicants with some minor exceptions. When participating in the EIC Accelerator blended financing program (formerly SME Instrument Phase 2, grant and equity financing), UK applicants were ineligible for equity investments by the EIC fund (read: Pre-Requisites for an Application).

This was due to the prohibition of any investments by the European Investment Bank (EIB) and the European Innovation Council (EIC) Fund in UK companies which would have otherwise been eligible for up to €15M per project in equity-financing (i.e. in addition to the €2.5M grant the UK was still eligible for) (read: Equity Financing under the EIC Accelerator).

It has now been confirmed that this situation will continue in 2021 under Horizon Europe (2021-2027) whereas UK companies can apply for grant- (i.e. €2.5M) but not for equity-financing (i.e. €15M). This has been reported by Science Business and was confirmed by the UK government through an explicit declaration which states:

“The United Kingdom and United Kingdom entities shall not participate in the European Innovation Council (EIC) Fund established under Horizon Europe.”

– Article 6 on p.21 of the Document

While access to €2.5M in non-dilutive grant financing is still an exceptional opportunity for UK startups and Small- and Medium-Sized Enterprises (SME), being excluded from the equity financing can present a barrier for future EIC Accelerator applicants from the UK. To counteract this limitation, it can be useful for such companies to establish EU subsidiaries or parent companies (i.e. in Ireland) which can be used for future applications to re-gain access to equity funding via the EIC Fund and the EIB.

This article was last modified on May 15, 2021 @ 13:58

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

How to Select an EU Grant Financing Program such as the EIC Accelerator (SME Instrument) – Part 3

This article is a continuation of Part 2 and describes a list of considerations to be made by startups and Small- and Medium-Sized Enterprises (SME) that seek to raise grant financing from the European Union (EU). One of these options is the EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) by the European Innovation Council (EIC) and European Commission (EC) which is highly suitable for innovative companies and has a strong support network of professional writers and expert consultancies (contact a professional writer here).

8. Country Restrictions

Which countries can apply?

Country restrictions have to be considered whenever they could be applicable. As an example, there are funding programs by the EU where only a certain country can apply while others are open to non-EU countries (i.e. Tunesia, Israel, Ukraine) such as most Horizon 2020 and Horizon Europe programs (read: Countries for the EIC Accelerator).

There can also be specific restrictions imposed due to special circumstances such as Brexit. Since the United Kingdoms (UK) participation in Horizon Europe was unclear throughout 2020 and 2019, UK applicants were only allowed to apply for grant financing under the EIC Accelerator but not blended financing since the EIC did not want to take equity stakes in foreign entities. Such potential issues have to be assessed on a case-by-case basis.

9. Submission Process

How is the submission process for the grant applicants?

The requirements for grant applications can vary greatly and have to be assessed based on their submission types, evaluation process and document requirements. Such variations have to be explored for each case but the general scopes for grant application can be summarised as follows:

Submission type: Online submissions (i.e. document uploads) are possible in many cases but the submission to local contact points or federal government institutes can be required as well. The EIC Accelerator uses the Funding &Tenders Portal for fully digitized submissions (read: Financing Timeline).

Evaluation process: The evaluation process will vary depending on the type of evaluators, their numbers, backgrounds and general focus. The EIC Accelerator uses a remote pool of evaluators via the European Agency for SME’s (EASME) and in-person juries for the pitch interviews (read: Interview).

Document types: The document types that are requested under a grant, as defined by the official proposal template, will vary but a normal PDF document like a business plan or a research plan are a must in almost all cases. The EIC Accelerator additionally requests financial spreadsheets, a short summary, a video pitch and a pitch deck (read: 2021 Application Proces).

10. Local Support Networks

What local support is available for companies?

Support on a national level is well organized in the EU due to an abundance of SME contact points in key European areas. These can provide a strong support network and can provide resources that help in future applications. Such help might not be available for all grant opportunities especially if the applicant does not classify as an SME which needs to be assessed beforehand.

11. Available Consultancies

Are there many consultancies specialising in the filed?

Lastly, it is useful to assess the number of consultancies or experienced writers that are available for a specific grant so that each prospect applicant is able to have a variety of options to choose from when hiring such supporters. It can also be beneficial to assess if the consultancies are working with multiple grants so that a more suitable option can be chosen instead of the original one in case of a rejection or if a more thorough assessment warrants such a transition.

For the EIC Accelerator, there are a variety of available consultancies to choose from with varying business models and industry focus (read: Preparing an Application). To reach out to a professional writer or consultant, please use the following contact form.

Summary

When choosing an EU financing program, the following aspects should be considered:

  1. Budget: How much is the total available budget and the financing per application?
  2. Covered Costs: Are all costs covered or only a percentage?
  3. Competitiveness: How high is the success rate?
  4. Thematic Focus: What specific conditions do projects need to fulfil (i.e. innovation, Technology Readiness Levels, industry)?
  5. Local Alternatives: Are there national funding projects available with easier accessibility?
  6. Number of Submissions: How often can an applicant submit an application?
  7. Single Applicant or Consortium: Is it a single-applicant program or exclusively for consortia?
  8. Country Restrictions: What restrictions are imposed on applicants when it comes to their country of origin?
  9. Submission Process: Is an online submission possible or a complex federal process?
  10. Local Support Networks: Are there support networks available or resources for applicants (i.e. templates, proposal examples, annotated guidelines)?
  11. Available Consultancies: Are expert consultancies and professional grant writers available for hire?

This article was last modified on Dec 20, 2020 @ 13:55

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

How the EIC Can Incentivise Shorter and Clearer Applications for the EIC Accelerator (SME Instrument Phase 2) – Part 3

Information for readers: The following is a description of a proposed evaluation process but it does not, in any way, reflect the current way EIC Accelerator applications are evaluated. For this, please read this article.

This article is a continuation of Part 2 (see also: Part 4 & Part 1). It describes a proposed evaluation process for the EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity financing) and investigates the potential mechanisms that can be used by the European Innovation Council (EIC) and European Commission (EC). The way an official proposal template is structured and its general restrictions clearly define the workload of both successful applicants and evaluators which makes a re-structuring the most powerful tool available to change the overall submission experience for all stakeholders from the written application, over the pitch video to the final interview (read: Assessing an Innovation).

Feedback Cycles and Proposal Examples

If the EIC wants to develop direct relationships with the applying SME’s and develop equality amongst applicants then the communication towards such applicants has to be precise and transparent. The EIC has not published examples of how a successful application should look like and is not providing useful feedback to applicants. As a result, applicants are relying on hiring third parties such as consultancies or professional grant writers who have the experience and insight to know what evaluators are looking for.

Without useful feedback by a human evaluator who has taken the time to write a single paragraph for the rejected applicants and without an actual successful proposal example, the EIC will remain a black-box for SME’s and start-ups. The existing manuals for Horizon 2020 are obscure and do not discuss quality writing, business plans and illustrations. Instead, the currently existing manuals give little to no useful guidance to applicants since they focus on discussing environmental-goals and gender equality rather than what a business plan should look like.

A solution to this could be dynamic feedback whereas an evaluator can send a message to the applicants who have the opportunity to respond to a question or critical assessment within a limited time-frame. If this response is reasonable, an evaluator is able to make a more informed decision while data on feedback about evaluators can be gathered internally to identify evaluators that are potentially unqualified or ideally qualified for such applications (i.e. improved match-making).

How an Evaluation Process Could Look Like

Scenario

  • Start: 6,000 applications
  • Funding available: 100 applications

Round 1 (Remote Evaluation)

Upload

  • Applicants provide a one-page executive summary with a 300-word restriction (i.e. graphics with bullet points). This reduces the writing burden significantly, simplifies the evaluation and also reduces the need for SME’s to learn EU-specific terminology which is not market-relevant (i.e. impact, excellence, TRL, etc.).
  • Inside the submission forms, the applicants’ fill out the information on the costs, financial projections, team growth, addressed EU policies (i.e. targets can be linked), gender, GDPR, etc. which can be quickly scanned by evaluators.
  • Applicants also upload a 10 min pitch video with full creative freedom (i.e. slide pitch with voiceover or a fully produced video – read: Preparing a Pitch Video)

Evaluation procedure of Round 1

Instead of evaluating each proposal individually, there are topic-based knock-out rounds whereas 3 keyword-matched candidates are compared with each other and the superior project receives the YES while the other two receive a NO grading. This is done by ranking all 3 projects whereas the winner of the three is determined by assessments from multiple evaluators. If there is a draw, two projects can both receive the YES grading or no project can be selected if it was found that they are all ineligible. An additional evaluator can be added in case results are unusual (i.e. a project is ranked first and last by different evaluators)

This process has the benefit of being very fast to conduct while the applications are quick to prepare (i.e. 3 applications can be assessed in under 2 hours). Since determining universal scores through subjective assessments by randomly selected evaluators is impossible anyways, a knock-out process is just as fair and is similar to the VC-like setting in the interview-stage. All applications receive a 300 word-feedback (100 words from each evaluator) which is presented to the applicants in their formal results.

This round also has the benefit of screening the projects for their impact on EU-relevant targets first while the business plan will only be assessed once the EU has determined that this is the type of project it cares about.

Result: 33% or 2,000 applications are selected.

Round 1b (Optional)

This round is internal and does not require any additional work from the applicants. In round 2, the 2,000 selected applicants are matched-up with each other again and are selected by new evaluators in the same manner whereas the result will be another elimination of two-thirds of the applicants. This is an optional round in case the number of applicants is exceptionally high (i.e. when starting with 6,000 applicants) but it can be omitted if the applications are between 1,000 and 3,000.

All applicants receive additional feedback which is added to the previous feedback (if Round 1 is passed) and made available via the evaluation summary report (ESR). All feedback is cumulative which means that the applicants will always receive more information on improvements the further they progressed through the evaluation.

Result: 11% or 667 applications are selected and are awarded the Seal of Excellence.

This article continues in Part 4 (see also: Part 1 & Part 2).

This article was last modified on Dec 10, 2020 @ 14:18

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

Key Takeaways from the EIC Accelerator Deep Tech Report (SME Instrument Phase 2)

The European Innovation Council (EIC) has published The Deep Tech Europe Report: key numbers from the EIC performance (PDF) which summarizes key impact figures and statistics with respect to the EIC Accelerators performance. The EIC Accelerator blended financing program (formerly SME Instrument Phase 2, grant and equity financing) has been active since 2019 and relevant statistics on the equity investments are expected to guide the programmes reshaping throughout Horizon Europe (2021-2027).

The analysis found in this document is not only useful for prospect Small- and Medium-Sized Enterprises (SME) but also for professional writers and consultants who seek to improve their knowledge on the EIC Accelerator and the EU’s future ambitions in general. The detailed information given discusses topics that are valuable and are not generally part of the official work programme or the annotated proposal template such as the selected industries, business models, size of companies and their financing history.

The following is a summary of key takeaways and perspectives on the EIC Accelerator Deep Tech Report:

EIC Budget: Horizon Europe vs. Horizon 2020

The EIC pilot budget will increase from €3bn under Horizon 2020 (2018-2020 – 3 year period) to €10bn for Horizon Europe (2021-2027 – 7 year period). This means that the budget will increase from an average of €1bn a year to €1.42bn per year (a 42% increase).

Key Performance Indicators (KPI)

Funded projects were matched by private post-project investments with €3.3 (2015) to €2.9 (2016) for each €1 invested by the EIC in 2015 and 2016.

Female Participation

15% of the beneficiaries for blended finance calls (since June 2019) have had female CEO’s. During the Green Deal deadline in May 2020, this number rose to 34% through the dedicated efforts by the European Commission (EC) to increase the share of women funded by the EIC Accelerator (i.e. gender must now be selected on the Funding and Tenders (F&T) platform – read: Official Proposal Template Updates). Without the Green Deal cut-off, the rate of female CEO’s would have been at only 8% of all beneficiaries.

Valuation

5% of the former startups and Small- and Medium-Sized Enterprises (SME) in the EIC’s portfolio are currently valued above €100m.

Applications and Success Rates

With 9,700 applications in a single year, success rates have dropped to 2-3% on average whereas success rates of 1% and potentially lower have likewise been observed due to the coronavirus pandemic (COVID-19), the strongly advertised Green Deal call (read: The Green Deal) and the generally increased appeal of the grant to startups.

Out of all applications, 2,537 companies have received the Seal of Excellence (SOE) which means that these SME’s have received a score above 13 (read: The EIC Accelerator Score).

Evaluators and Jury Members

2,400 evaluation experts (i.e. for the written application in step 1) and 100 jury members (i.e. for the pitch week interview in step 2 – read: Pitch Deck) have been imperative to selecting the successful applications and assuring high-quality EIC Accelerator awards (read: EIC Accelerator Financing Timeline). The gender of the jury members has been well-balanced with the aim of having fairer results and gender equality whereas 51% of members were male and 49% were female.

While the step 1 evaluators are of varying backgrounds, the jury members have a strong investor-oriented background with 27% being innovation and industry specialists, 24% being venture capitalists, 22% being serial entrepreneurs and 19% being business angels.

Geographic Analysis

The top EIC Accelerator (SME Instrument Phase 2) companies by country have been Spain (930), Italy (701), the United Kingdom (UK – 459), Germany (377) and France (343) whereas associated countries such as Tunisia (0), Anguilla (2), Greenland (1), Armenia (1) and Gibraltar (0) were less represented.

Size of the SME’s

Judging by the numbers of employees, there has been a strong trend towards micro (1-9 employees) and small businesses (10-49) which are making up 97% of all applicants at equal shares whereas medium-sized businesses (50-249) only made up 3%. This is underlined by the share of medium-sized companies dropping gradually from 12% in 2014 to 3% in 2020.

Age of SME’s

When separating the funded EIC Accelerator companies into their founding dates, a trend towards preferring young SME’s has been observed whereas the share of over 10-year-old companies has dropped from 32% in 2014 to only 9% in 2020. In the same time frame, the youngest startups with an age below 5 years have grown from 47% to 63%. This underlines the interest of the European Union (EU) to encourage breakthrough innovation and reach short time-to-markets.

Selected Industries

From an industry perspective, the top-funded EIC Accelerator projects were representative of the Health (1,262), Energy (922), IT software (735), Transportation (424) and Food industries (396).

Target Customers

From a business model perspective, 77% of companies followed a Business-to-Business (B2B) approach while only 23% were targeting end-users through Business-to-Consumer (B2C) products.

Blended Financing (Grant with Equity Option)

For all awarded blended financing applicants in 2019 and 2020 (4 total cut-offs and 140 winners), the overall budget was €278m in grant financing and €583m in equity with €6.5m being the average financing amount.

EIC Accelerator Follow-Up Investments

EIC Accelerator-awarded companies have attracted a total of €5.3bn in follow-up funding through private investments or similar channels (i.e. equity, debt, Mergers & Acquisitions, Initial Public Offerings – IPO’s).

Equity investments made up a total of €4bn (74%) of the financing in subsequent Series A, growth equity or similar funding founds. Most of the investments were stemming from European sources (69%) whereas 22% were raised from the United States and 4% from Chinese investors.

Successful Exits of EIC Accelerator Companies

Initial Public Offerings (IPO) and acquisitions were the most common exits for EIC Accelerator-awarded companies with 17 and 43 in total, respectively, since 2015. Valuations of the top 10 companies were ranging from €200m to €700m with the annual growth being as high as 40%.

This article was last modified on Jan 12, 2021 @ 10:09

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

Developing a Commercial Strategy for the EIC Accelerator (SME Instrument Phase 2)

One of the core sections of an EIC Accelerator application (SME Instrument Phase 2), taken from the official grant proposal template, is the commercial strategy. Such a strategy might seem very straight forward in many cases but, in order to fully advertise the impact and scalability of a project, great care should be placed into describing its key assumptions and stakeholders.

A professional writer or consultant should assure that the commercial roadmap of the company is not solely based on completing the product developments and then to simply describe what geographical market segments will be entered but to expand on the measures taken towards scaling inside these markets.

A commercial strategy should describe a network of partners which have been carefully selected and who are imperative to reaching the target customers. As such, these partners should be well-explained inside the grant application and their main roles, as relating to the commercialisation, should be outlined clearly.

Trusting in a Startup

If a new startup or Small and Medium-Sized Enterprise (SME) is entering the market, many customers might be sceptical at first. This can especially be a factor for a B2B product because most established companies have seen many new market participants come and go over the years and are not particularly interested in making any commitments towards a company that could be out of business soon.

As a result, trust is a core factor to consider when bringing a new product to the market and the best way to build it is either through social proof (i.e. validation by trusted third parties) or an impressive track record (i.e. validation through product success). Both tend to go hand-in-hand since an impressive track record usually stems from the existence of many happy customers who, in themselves, act as third-party validations.

Social proof, on the other hand, could mean that external partners who already have a significant amount of trust are willing to invest time and money into the company which, in turn, signifies trust to other interested customers. This part is essential when building a commercial strategy since it can make the difference between slow progress and exponential growth of the product’s deployment.

As a simple metaphor, there are plenty of amazing books that have never been read by more than a few hundred people while there are entirely average reads that have risen to the top and became bestsellers. A great product is of little value if its gathering dust on the shelf which is why the commercialisation has to receive as much attention as product development.

Building a Trusted Network

The ways to increase the trust customers have in the company is to consider which commercial partners hold the highest level of authority for the respective target market. A certain hardware accessory might seem less appealing if offered through a retailer as part of a larger portfolio but would be valued considerably higher if an Original Equipment Manufacturer (OEM) has taken a liking to the technology and decided to implement it directly into new products.

A new company should ask itself: Which commercial channel will build the highest level of trust with customers? Taking, as an example, a new autonomous driving technology for commercial vehicles, we can envision a hierarchy of suitable commercial strategies:

First Level: OEM

The highest level of trust would lie with OEM since they understand the customer (i.e. vehicle end-users) better than anyone and are already selling vehicles at scale. If Mercedes decides to implement a certain technology, every consumer will assume that the product is of the highest quality. The trust is already established which means that the only questions a consumer will pose are related to the product features and the pricing.

Second Level: Service

Secondary partners could be intermediaries and stakeholders who are an essential part of the value chain but are considered optional. These could be mechanics, regulators, certifiers or car renting businesses who, likewise, have a high level of consumer trust and who’s opinions hold weight.

As an example from a different industry, we can imagine a customer who is operating large pipeline networks and who wants to introduce new security measures to reduce the occurrence of damages or accidents. If a consultancy or mechanic who has been hired to find an appropriate solution was to recommend a new technology as the ideal option for this case then, once again, the attention will be placed on features and pricing but not on the technology itself since trust is already established.

Third Level: Retail / Distribution

Using distributors and retailers in this scenario is still a highly valuable commercial strategy but it might significantly impede the scalability or speed of the market entry if the chosen partners do not have the trust or incentive to recommend the product. It is useful to consider what could lead to exponential growth rather than a gradual increase in sales and which strategic partners could lead to the highest envisioned market impact.

Summary

While there are a lot of factors and nuances that flow into a great commercial strategy, leveraging the trust of partner networks is a useful approach in crafting customer relationships. It can also be a good way of thinking out-of-the-box and diversifying an existing strategy with additional partners and sales channels since, in the end, it is hard to predict which avenue will see the highest growth rate and end up being the most profitable channel:

  • First Level: Original Equipment Manufacturers (OEM) who directly include technology into their existing portfolio and distribute to end-users
  • Second Level: Service providers who are frequently used and can add technology to their portfolio and recommend/apply it to end-users
  • Third Level: Retailers and distributors with access to large customer bases

This article was last modified on Oct 9, 2020 @ 10:56

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

The Biggest Mistakes When Applying to the EIC Accelerator (SME Instrument Phase 2)

Every once in a while, a company is reaching out to us with a rejected EIC Accelerator grant (SME Instrument Phase 2) application which they have prepared themselves but were unsuccessful with. Very rarely, such self-prepared applications are professionally written and reach a high score (i.e. above 13 out of 15) whereas, in most cases, these applications are well below scores of 12 and even below 10 in some cases.

Some common themes can be noticed when reviewing such applications and this article presents a list of the most common reasons why self-prepared applications have low scores. Usually, a lack of product innovation, an unexperienced team or the company itself are not the biggest reason for the low rating but the quality of the grant writing.

Of course, the innovative nature of the applying Small and Medium-Sized Enterprise (SME) or startup is important as well but the eligibility requirements from the European Commission (EC) and European Innovation Council (EIC) are relatively broad and inclusive enough as to not discount most projects.

Reason #1: Viewing the template as a questionnaire

The official EIC Accelerator grant application template (see Deviations from the Template) should be followed only as a general guideline and be used to develop and structure an application that is comprehensive and unique to the applying company. It should not be viewed as a questionnaire which is simply answered with a few general text snippets in the hopes that the reader will read between the lines.

None of the text found in the original template, outside of the headlines, should appear in the written application (i.e. none of the posed questions should be placed inside the proposal). The same goes for footnotes, guidelines, tips, abbreviations and rules which can be entirely omitted from the final proposal. All of the content found in the template acts as a guide for the applicant and does not need to be reproduced for the evaluator.

In addition, the official EU template is (intentionally) scarcely formatted and lacks guidelines on figures, tables and photos which is why it should by no means be viewed as a style guide or guide book for an EIC Accelerator application.

Reason #2: Addressing sections too shallowly

Imagine having a conversation with someone who only answers with “yes” or “no”. Every person would immediately lose interest in this interaction since a conversation is supposed to flow with each spoken sentence leading to a multitude of other sentences. In the same way, the European Commissions’s evaluation and review experts expect applicants to elaborate on each point which is why the writer should focus on telling a complete and impressive story.

In the end, the EU is looking for high-risk and high-reward unicorns which makes excitement and passion, in written form, a must for every application.

If the template asks for the timing of the innovation, why not elaborate as to why the current point in time is perfect to invest? Why is the market timing perfect? Why not describe the timing of the customer needs or competitive differentiators?

The key to avoiding this mistake is to be comprehensive but not too wordy. To add useful and valuable content that directly addresses the posed question but also addresses the criteria found in the Evaluation Summary Report (ESR) which presents the grant proposal rating (see Using the Evaluation Summary Report).

Reason #3: Not viewing the proposal as a story

The proposal must be a very well written business plan but also tell an exciting story. As such, there might be a variety of sections that seem unrelated (i.e. the intellectual property and the key performance indicators) but they should all be connected in some way so that the proposal makes sense and is consistent (see Identifying a Broad Vision for an EIC Accelerator Project).

It is also necessary to have a wholesome approach to proposal writing in order to fill in the gaps between sections (i.e. transitions) so that each section naturally flows into the next one. The proposal template might omit certain aspects or only ask for them vaguely instead of directly requesting them, i.e. a comprehensive introduction which could give context to the innovation, information on the companies financial health or other items commonly found in a business plan.

The final grant proposal should stand on its own (i.e. not rely on the template to make sense) and answer all the questions of an investor or Venture Capitalist (VC) while also being an interesting read. A great story has a beginning, a middle and an end which should be considered for the entire application (i.e. the problem, the solution and the roadmap) so that it builds trust with the reader and does not appear too shallow.

Reason #4: Omitting important sections that were not in the template

The EIC Accelerator grant proposal template does not account for the vast individuality between projects and applying companies. Describing the commercial strategy for a Business-to-Business (B2B) versus a Business-to-Consumer (B2C) project will require a different set of assumptions while a Software-as-a-Service (SaaS) subscription model will be different from one-off hardware sales.

The EU cannot account for each case individually which is why the template is very general. The grant writer has to account for this and understand that the template is vague by design so that each applicant proactively elaborates on the respective sections according to their specific case.

The level of detail put into an application and the degree to which sections are described will also immediately tell the evaluator how well a certain project is thought through which, in turn, will dramatically affect the proposal score.

Reason #5: Not taking enough time for the writing

Every applicant should at least leave 50 days to prepare a great application and under no circumstances rush the process. In very rare cases, a company can prepare a competitive and professional application in only a few weeks but this is usually reserved for a case in which extensive business plans have already been written beforehand (incl. prepared financial projections, development plans and budgeting).

One of the most common reasons why companies receive very low scores is that the application was prepared in a rush (i.e. in under a week) without properly reading the Work Programme and template as well as treating the application as a low-effort lottery ticket and not as a well-crafted financing proposal.

Reason #6: Not understanding the evaluation criteria

The evaluators will grade the proposal based on a certain checklist of criteria and not only rate them based on their overall impression (i.e. the ESR criteria – see here). All of these individual points (i.e. criteria) will need to become an integral part of the written application even if some are entirely absent from the template itself.

It is useful to first read the evaluation criteria and then to read the EIC Accelerator template since both documents are an important part of a successful grant application. This attention to detail alone will already place the applicant ahead of the competition since most companies are not aware of the difference between the template and the evaluation scoring.

It is common, especially for first-time applicants, to not understand how proposals are graded and to mistakenly view the official template as the only guiding document.

Reason #7: Not being persistent enough

It could be that the proposal, while having been rejected, is not a lost cause by default but only needs more time. Maybe the initial score was above 13 (out of the maximum 15) and the application simply needs a few useful additions in order to reach the threshold for the interview invitation (i.e. EIC Accelerator pitch week in Brussels).

If so, there is currently no limitation as to how many times an application can be submitted which allows each applicant to edit and improve the proposal for a re-submission with improved results.

The success rates for the highly competitive EIC Accelerator can oscillate between 1% and 7%, depending on the specific deadline and occasional pandemic, while the scores for unchanged resubmissions can vary as well, depending on the randomly chosen reviewers.

From experience, it usually takes multiple attempts in order to receive the grant financing which is why no company should give up too early.

Reason #8: No effort is made for the annexes

While Document 1 is unquestionably the most important part of the EIC Accelerator application, attention should also be placed on the annexes, namely the pitch deck, the financial documentation and the general annexes (see Software Choices for the Annexes). While these might receive less attention during the evaluation process, they will greatly influence the overall impression of the application and, in addition, the pitch deck cannot be changed once step 1 is achieved.

Making the annexes look professional and well-designed takes little effort compared to writing Document 1 and it should not be neglected in order to maximize the applications success chances.

Summary

The biggest reasons as to why self-prepared applications receive low scores are:

  1. Viewing the template as a questionnaire: The template is only a guide and should not appear in the proposal
  2. Addressing sections too shallowly: Every section must show a high level  of  depth
  3. Not viewing the proposal as a story: Good writing over cryptic brevity
  4. Omitting important sections that were not in the template: Customizing the proposal to the unique project
  5. Not taking enough time for the writing: Attention to detail takes time – at least 50 days
  6. Not understanding the evaluation criteria: Reading what the scoring will be based on – the ESR (see here)
  7. Not being persistent enough: Re-submissions are key
  8. No effort is made for the annexes: Making every proposal document as perfect as possible (see here)

This article was last modified on Feb 19, 2023 @ 23:33

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

Why It’s Great to be a Female Entrepreneur in the EU (EIC Accelerator)

The Europen Commission has long implemented policies and targets to increase gender equality across all industries and government institutions. While the EIC Accelerator (formerly the SME Instrument Phase 2) has been largely free from any interventions of such policies, there are a variety of factors that have been part of the evaluation process for a long time.

The Gender Dimension of the EIC Accelerator

The proposal template and the evaluation results have always included comments on gender equality for all applying Small- and Medium-Sized Enterprises (SME) or startups which means that the score of a submitted proposal has always been affected by gender-related policies (see Using the Evaluation Summary Report (ESR) to Improve Grant Proposal Writing). Furthermore, if two applicants have a matching score, the number of female team members in the respective company could influence the success of the application as well.

In every EIC Accelerator application, it is therefore of benefit for the success of the proposal to address hiring, gender treatment and the effect of the project on gender equality as a whole. It is also useful to research the repercussions of a certain technology on gender differences.

Preferential Selection of Female CEO’s

Since the Green Deal cut-off in May (see The European Green Deal – A Dedicated Cut-Off for the EIC Accelerator), the EU has implemented new progressive policies to increase the number of female entrepreneurs. The initial goal was to boost the number of women-led companies who successfully received the grant funding from the previously small level (i.e. 1-5%) to 25% of all selected companies under the EIC Accelerator (SME Instrument Phase 2).

For the May cut-off, this target has even been exceeded with the total share of female CEO’s who received the grant being an unprecedented 34%. This means that the number of women-led companies that have been financed in May 2020 is higher than the number of all female CEO’s funded in the previous deadlines combined (i.e. 22 were funded in May and 16 combined for March and January).

source: @JeanDavidMALO1 on twitter

The ambitious quota was reached by reducing the threshold (i.e the minimum score needed to receive an interview invitation) for female CEO’s so that the number of invited female-led companies increased accordingly. To organize such a policy, the EC had each EIC Accelerator applicant declare the gender of their CEO within the submission forms so that such selections could be automated to reach the required number. If the gender was not declared, it was considered to be male by default. In addition, if the quotas were not being reached during a single interview week, previously rejected female-led companies would be eligible for a runner-up interview to reach the 25% mark.

Conclusion

This policy presents a great opportunity for female-led companies since the threshold for the invitation, influenced by the selection quota, is lower for female CEO’s than for male CEO’s. This, of course, does not mean that women have it easy in any way but it can make the difference between almost not receiving an invitation to the pitch week in Brussels and being invited (and potentially funded).

The projects that are reaching evaluation scores above 13.5/15 and are entering step 2 of the EIC Accelerator, female or not, are all high-level business proposals deserving of funding with the difference between invited and not invited being obscure in many cases. As such, every advantage should be welcomed by eligible companies.

Considering that the shares of invited and funded women-led companies have been as low as 5.9% and 2.3%, respectively, earlier in 2020, the overall rise can be seen as 5- to 17-fold in only six months (and likely much higher compared to 2019). Depending on the cut-off and some luck, women can have a substantial advantage and should consider applying to the EIC Accelerator if they are working on an innovative technology with significant scale-up potential (see Business Models for EIC Accelerator Applications).

This can also be of benefit for companies that have unsuccessfully applied to the grant before since they might have an easier time receiving the interview invite in the future. This, of course, does not mean that a low-quality or poorly edited application would receive a high score just because of the CEO’s gender but a professionally written proposal can have higher chances for the October 7th cut-off.

This article was last modified on Oct 9, 2020 @ 12:06

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

The Financing Timeline For EIC Accelerator Applicants (SME Instrument Phase 2)

The EIC Accelerator (formerly SME Instrument Phase 2) is a highly competitive grant (as well as equity) financing program by the European Commission (EC) and the European Innovation Council (EIC). Many startups and Small- and Medium-Sized Enterprises (SME), in their journey of seeking financing sources, discover this opportunity since it allows single, for-profit companies to directly apply through an online submission process (i.e. the Funding & Tenders Portal).

While the EIC Accelerator is a highly lucrative opportunity for any innovation startup (see a country list here), it should be stressed that its two-step evaluation process (i.e. the written application and the in-person interview) makes it one of the most competitive initiatives available today.

Even though the proposal template allows for a remarkable degree of creativity as to how critical sections like the current stage and the planned developments are justified, it should be noted that the jury pitch will be significantly more strict.

As such, it is beneficial to assure that the current stage of the innovation project, and especially its financing status, is aligned with the EIC Accelerator’s vision. Every applicant, consultant and professional writer should confirm that a company fits the following criteria since the current rules under Horizon 2020 will likely become more strict under the Horizon Europe (2021-2027) funding programme.

1. Beyond the Idea Stage (Seed Financing Received)

The starting point for the EIC Accelerator application is Technology Readiness Level 5 or 6 (TRL – see How the EIC Accelerator Funds Technology Readiness Levels) which means that the respective innovation should have already seen some major developments and testing.

These past developments usually go hand-in-hand with existing seed funding, past grants, angel investments or similar support which have helped in bringing the concept (i.e. idea stage) to an operational prototype.

The EIC Accelerator is not interested in financing ideas or concepts that have no real-life applications which means that every applicant should already be reasonably close-to-market (i.e. 1 to 2 years away from the market introduction) and exhibit some degree of commercial traction. If a company manages to enter the interview stage of the EIC Accelerator but does not have a functioning prototype or proof-of-concept yet while also not being able to justify a proven market need, the pitch will likely be unsuccessful.

2. Non-Bankability (No Significant Funding Available)

Non-bankability, as asked for in the official proposal template, is a very difficult criterion to address since it does not mean non-investability of the company but that a certain technology cannot be funded through conventional means (i.e. banks, venture capitalists, profits, etc.).

Going further, being non-bankable also does not mean that a certain company has never had any investments at all and is unable to raise any type of funding. This is reflected by the EC’s rule to only provide 70% of the project costs (i.e. for the grant) which makes external financing or profits a must (read more here: The EIC Accelerator: Grant vs. Blended Financing (Equity)).

This, of course, seems contradictory to some degree since any great startup with past investments could theoretically find a way to finance a project if the business plan is promising enough (i.e. convincing investors, customers, etc.).

What the EU is looking for is a financially capable company (i.e. having raised seed investments) but is still in financial need for the proposed project. Following this definition, non-bankability can be explained by justifying how a project is currently too high-risk for VC’s (or comparable financing sources) since it lacks technological maturity. Potential investors prefer further de-risking until they would be willing to invest.

Every applicant or writer should find ways to solidify such a statement on a case-by-case basis since non-bankability will be a significant factor in the evaluation process up to the interview (i.e. “Why do you need EU support?”).

3. No Major Financing Rounds Raised

Non-bankability specifically addresses the project which the applicant seeks funding for. This becomes increasingly difficult to justify if an SME generates €1m+ in profits per year or has recently raised €10m+ in a VC financing round. Any company that is able to raise funds comparable to, or in excess of, the EIC Accelerator grant (or blended financing with equity) will face significant scrutiny from the evaluators.

The simple rule should be to not perform major financing rounds while also applying to EU financing unless a rejection does not impede the overall company strategy.

This can, of course, be difficult since there are only 4 EIC deadlines  (i.e. cut-offs) per year and multiple resubmissions can easily span over the course of 15 months. If major financing rounds are planned prior to beginning the submission process then it should be decided in advance if the EIC Accelerator grant is a must-have or nice-to-have so that a potential rejection will not impact the companies financial health.

Summary

In summary, these three points should be considered when assessing a companies financing status:

  1. Past financing achieved (i.e. seed rounds)
  2. Non-bankable (i.e. unable to leverage funds from other sources)
  3. No major financing rounds (i.e. pre-VC)

This article was last modified on Oct 9, 2020 @ 12:04

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 (short proposal)
    • open now
  • Step 2 (business plan)
    • 1st cut-off: (early 2024)
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: -
  • Step 3 (interview)
    • 1st cut-off: -
    • 2nd cut-off: -
    • 3rd cut-off: -
    • 4th cut-off: January 29th to February 9th 2024 (extended again)

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, 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:

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)