I am talking to a lot of startups regarding EU funding and I frequently get asked if it is possible to apply to Phase 2 of the SME Instrument directly.

The answer is: Yes. Technically you can but in reality, most startups do not have enough data (market, business plan, strategy, financial projections, users etc.) for the application. On top of that, the chances to receive Phase 2 funding after a completed Phase 1 are twice as high.

My suggestion is always to get Phase 1 first since it is easier to finance and then use the financial support to prepare for Phase 2.