The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) by the European Commission (EC) and European Innovation Council (EIC) is a complex funding instrument for startups and Small- and Medium-Sized Enterprises (SME).
It is often supported by professional writers, freelancers or consultants since it can be challenging for startups to navigate the lengthy assessment and proposal writing process. This article aims to provide a brief but comprehensive overview of the program to help future applicants decide if the EIC Accelerator is the right instrument for them.
What is the EIC Accelerator?
The EIC Accelerator is a funding program by the European Commission (EC) and the European Innovation Council (EIC) as part of Horizon Europe.
It funds innovative DeepTech companies with grant and/or equity financing of up to €2.5 million and €15 million, respectively (see 2023 Budget).
Applicants can be from the EU-27 countries or from countries associated with Horizon Europe (see Eligibility).
The company’s technology should have reached Technology Readiness Level (TRL) of 5 at least and be able to reach TRL8 within 24 months but exceptions can apply (see Technology Readiness Levels).
What does the EIC Accelerator provide?
Next to business acceleration, coaching and networking opportunities, it provides funding in the form of 4 different application options:
- Grant-only: A non-dilutive grant with the company reaching TRL8 at the end of the project and subsequently reaching TRL9 without the help of the EIC.
- Grant-first: A non-dilutive grant with the company reaching TRL8 at the end of the project. There is an option to apply for dilutive equity financing from the EIC Fund afterward to reach TRL9 (see Grant-First).
- Equity-only: Dilutive equity funding from the EIC Fund to reach TRL9.
- Blended finance: A mix of non-dilutive grant and dilutive equity financing to reach TRL9 at the end of the project.
How do the different funding options finance development work?
In general, grant funding can only be used for activities up to TRL8 (i.e. TRL5 to TRL8) while equity funding can be used for developments up to TRL9 including innovation activities (i.e. TRL5 to TRL9).
What industries can apply and are there topic limitations?
The EIC publishes topics every year in the EIC Work Programme which outlines specific budget allocations. Generally, the budget is split between the options of an “Open” and a “Challenge” Call which are usually available on the same cut-off dates (see Deadline). A company can therefore decide which topic they would like to apply for. The two options are:
- EIC Accelerator Open: This call is open to applicants of all industries provided they are not violating the agendas of the European Union (EU) in terms of climate, human rights, ethics and other political and social targets.
- EIC Accelerator Challenges: These topics are clearly defined technology and industry themes that must be achieved or covered by the applicant (see EIC Accelerator Challenges). The applicant can select the respective Challenge during the Step 2 submission process.
When and how can I apply?
The EIC Accelerator generally has 3-4 cut-offs per year which are set for Step 2 submissions (see Deadline). The following conditions apply:
- Step 1: This step encompasses a short application including a pitch deck (see Pitch Deck), a video (see Pitch Video) and a short proposal. Submitting a proposal is possible at all times since the call is continuously open.
- Step 2: This step requires a very detailed business plan in addition to multiple annexes such as financials, Letters of Intent (LOI), a Freedom to Operate (FTO) analysis, a Data Management Plan (DMP), a pitch deck and a customizable company profile. After Step 1 has been passed, the applicants can apply to Step 2 to any of the designated deadlines (see Deadlines).
- Step 3: This step is an interview with the EIC Jury that is usually conducted online through a video call. It encompasses a 10-minute pitch by the applicant using the pitch deck submitted in Step 2 and an up to 35-minute Question and Answer session by the jury (see Interview Preparation). If Step 2 has been passed successfully, the interview dates are generally a few weeks after the Step 2 evaluation was completed.
The EU application process is performed on a dedicated website provided by the EIC where an online form is acting as the proposal template. Each applicant can create the appropriate proposals and begin writing applications inside the web browser although it is recommended to use off-platform templates to prepare all documents in collaboration with a team and then upload the content for the submission.
What does the result of an application look like?
The EIC has increased the level of transparency compared to earlier years and has introduced detailed feedback from evaluators. For Step 1 and Step 2, four or three evaluators will grade the application, respectively, and leave feedback for the applicants.
- Each evaluator will be able to grade the proposal with a GO or NO GO rating.
- For Step 1, at least 2/4 of evaluators have to provide a GO for the application to be successful.
- For Step 2, at least 3/3 of evaluators have to provide a GO for the application to be successful.
Feedback is provided to the applicants irrespective of the GO or NO GO grading through detailed responses by the evaluators for all evaluation criteria (see Evaluation Criteria).
For the Step 3 interviews, a unanimous decision by the EIC Jury is presented and the applicants likewise receive responses regarding the evaluation criteria as well as the GO or NO GO result.
If the applicant passes all three steps, the preparation for the Grant Agreement Contract (GAC) and a due diligence process are initiated.
How long does it take to apply for the EIC Accelerator?
The time it takes to apply for the EIC Accelerator will differ depending on the number of resubmissions and the efficiency of preparing an application. It can be further delayed if the due diligence process is slowed down from the side of the EIC.
In general, one can expect a timeline of 2-4 weeks for the preparation of Step 1 followed by a 5-30 day average assessment period. For Step 2, a 50-70 day preparation period followed by a 30-40 day assessment period should be expected. With the Step 3 interviews following approximately 2-6 weeks after the Step 2 result is obtained, one can add an additional 3-5 weeks to receive the final grading by the EIC Jury.
A fast application process can go from the Step 1 start to Step 3 approval within 6 months if no rejections have occurred and if all documents were prepared efficiently without waiting times.
In case of rejections and multiple resubmissions, the total process can also take multiple years and there is never a guarantee that a project will be funded.
What are the success chances for the EIC Accelerator?
Since the 3-Step application process is complex, it is difficult to estimate exact numbers for success rates. If 1,000 companies apply for Step 1 and 70% receive a GO over multiple weeks then it cannot be determined based on the published data how many of these exact companies proceed to the subsequent Step 2 deadline (see Deadlines).
The metrics are further obscured through the previous batch being able to resubmit their applications or abandon the application entirely.
- Step 1: ~67% pass rate
- Step 2: ~22% pass rate
- Step 3: ~32.5% pass rate
- Total EIC Accelerator success rate: 4.8%
What limitations exist regarding the submissions?
The EIC Accelerator has introduced freezing periods for resubmissions whereas every applicant generally receives two attempts for each written proposal step (i.e. “two strikes, you’re out”). This means that a company that has failed twice in Step 1 will be blocked from submitting the same application for 12 months. The same is true for Step 2 applications.
There are nuances in the case of the Step 3 interviews which are explained here: Resubmission Process Explained.
What types of companies actually win the EIC Accelerator grant?
The companies that generally win the EIC Accelerator are often DeepTech hardware businesses but there are likewise software and IT industry winners among the funded projects (complete beneficiary lists are linked here: 2021, 2022A, 2022B).
How do I know if I should apply or not?
Predicting who will receive funding under the EIC is difficult even for seasoned consultancies. While it is possible to estimate the chances, the level of randomness during the evaluation process and the unknown variables introduced by the company during the proposal writing process render any estimate to be speculative.
If the company has an excellent technology, a great team, a scalable business model and is aligned with EU interests then the EIC Accelerator is worth pursuing.
Here is a list of general considerations for an ideal project: A Winning EIC Accelerator Candidate
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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.
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by Stephan Segler, PhD
Professional Grant Consultant at Segler Consulting
General information on the EIC Accelerator template, professional grant writing and how to prepare a successful application can be found in the following articles: