In this fourth part of the EIC Accelerator interview guideline, the focus is shifted to specific training tools targeted at improving how questions are answered. Startups and Small- and Medium-Sized Enterprises (SME) can use these tools to better prepare for their own pitch event, investor conversations and, of course, interviews by the European Innovation Council (EIC) or European Commission (EC).
The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) is a highly selective funding program and, even though the chances of receiving funding in Step 3 can be as high as 50%, it should not be left to luck if one will be successful or not since up to €17.5M are at stake.
Note: If the previous steps are included, the overall success rate is 5% or below.
The ideal scenario is to have a consultant, professional writer or pitch coach take the lead in the preparation process since identifying weak spots and fixing them with improved answers or arguments can be difficult for a company.
The following training tools are presenting a way of preparing for interviews but they are by no means the only way and not using them will not lead to a guaranteed rejection. Examples for each segment of the training tools and recommendations on how to practise them will be given in a future article. This article will only provide a general description of such training tools.
What To Practise (Improving Answers)
One important rule for the EIC Accelerator Questions and Answers (Q&A) session is to not display critical flaws. This has been elaborated in earlier parts of the guide and it is relating to every time the interviewees are caught off-guard, have no answer or are unable to refute a negative point (i.e. you are not innovative).
While the jury will be perfectly polite and respectful, there might be one or two jury members that have already decided that the project is insufficient and are finding fault in everything they hear. As a result, they might swing the opinion of the other jury members which will, inevitably, lead to a rejection.
Address the Concern
This is one of the greatest tools for an EIC Accelerator pitch interview. It is too easy to neglect the concern behind a question and just answer it on a surface level which can lead to a dissatisfied questioner or, in the worst case, unwanted follow-up questions. The idea of this tool is to ask yourself: “What concern does the jury member have to ask this question?” And to then address that as opposed to the question being asked. One could say that you are exchanging the posed question with what you deem to be the real question.
Answers can be worse than questions because, instead of addressing the original concern, they can create many additional concerns.
Why? Because an answer can unwillingly reveal ignorance, weaknesses or present an attack vector for critical jury members. It is impossible to prepare for every single question since, while some will be foreseeable, the majority will be unpredictable. This is especially true for follow-up questions since, while the starting question can be obvious, the two or three follow-ups afterwards can be entirely unpredictable since they can have little to no relationship with the original question.
This can be viewed as a chaotic system where prediction is possible in the early stages but becomes increasingly difficult and eventually impossible the further the system progresses. An example of this is the Double Pendulum which can be predicted in its earliest swings but rapidly becomes too chaotic to make any accurate predictions.
To avoid pitfall answers, the strategy should be to (1) control the topics of the conversation as much as possible and (2) avoid giving any answers that can render the jury members less confident in the team or project.
While someone like Elizabeth Holmes (former CEO of the disgraced blood-testing BioTech company Theranos) is a poor role model for entrepreneurs due to her history of deception and ongoing fraud trial, she was able to demonstrate that you can raise $1.4B in financing without providing any real answers, technology or even allowing due diligence.
Being the technical lead of a BioTech company as a college drop-out was clearly a warning sign but she would have likely excelled in marketing or investor-relations positions since she accomplished what most companies cannot. There are many excellent companies that are applying for €2M under the EIC and are rejected while Holmes raised 700-times that amount without as much as a proof of concept.
Even though the source of this insight literally has blood on its hands, there are lessons to be learned. The way she emotionally directed conversations exceeds the scope of this guide (i.e. slowed speech, staring to trigger a change of topic, very long answers without specifics) but the simple tactic she often used was this: Zooming out.
When asked a specific question on how the technology worked, she would elaborate on her vision. When asked about her customers, she would expand on what she wants to bring to the world. She would always zoom out and take a birds-eye or distant view.
While this approach should not be used by any entrepreneur as a default response (i.e. Pfizer and other consultancies caught her very early on during their due diligence), there is one part that builds trust with investors that many DeepTech companies lack. It is the confidence and the great vision.
This should be used sparingly but it can be essential if the jury feels like the team lacks the ambition to implement a project or see it through until the end. It can also be a great last resort in case the interviewee is stuck and has to answer a difficult question on something not entirely relevant to the project or catches the team off-guard.
Controlling the Follow-Up
A simple but effective habit in answering questions is to carefully consider what a follow-up question could be. If someone responds to my question on the financials and mentions low-profit margins then I will follow up on it. If someone, instead of the profit margins, mentions the year-by-year growth potential of the company then I would be inclined to follow up on that.
The point of controlling the follow-up question is to only mention things that you want to be asked about. The question will, by design, ask for information on a certain topic but the interviewee can decide which angle to take. This especially goes for the ending of the sentence. If one says “We do A and B but we currently mostly focus on C because C is very important” then it is more likely to get a follow-up question on C rather than A and B.
Every company should have a balanced view of their competitors, industry trends or market threats but it can be a significant flaw to overly focus on them. Especially when it comes to startup’s in highly technical fields, there is often a sense of respect for other companies who are innovating in similar areas or for new technology trends that are unrelated to the applicant’s business.
No matter what the reason would be, if a company only has 35 minutes to convince an EIC jury to make a funding decision then the interviewees should refrain from overly focusing on other things. In fact, if a CEO were to praise their competitors and mention that they are “developing amazing technologies” and starts to describe them then this will likely be a poor use of the available time.
Every question has an underlying concern and it will never be “Is your competitor good at what they do?” but more likely be “Can you overcome competitive threats?”. While both questions have their topic in common, they will have very different answers. Whatever the question might be, the interviewee should lead it back to why the project is great.
Are you asked about the market? End with why you are perfectly positioned to enter or create it. Asked about competitors? Mention who they are and then elaborate on why you are better. Asked about your co-investors for the EIC Fund? Mention who they are and then highlight how further de-risking through the EIC is needed before they will invest.
Always bring the conversation back to what is beneficial to you.
The Confused Question
Every once in a while, a jury member will not be an expert on a certain technology but still ask a highly technical question. If this happens, there is a possibility that they have already misunderstood certain aspects of said technology but ask a follow-up question regardless. The interviewee has to always ask themselves: “Does their question reveal their ignorance on a certain subject?” If the answer is yes, then one must take a step back and first explain the concept again but in the simplest terms possible.
This part is critical since highly technical founders with not only a high level of expertise in a scientific field but also exclusive knowledge regarding the innovation will often be too far ahead to understand the viewpoint of someone entirely new to the field. Just answering the question and highlighting the benefits of the technology might not be enough which is why a simplified explanation is in order.
Practise “Dumb” Questions
The EIC jury members are intelligent and highly competent professionals with a great deal of experience. Still, one should prepare for questions that a startup might not view as relevant or simply disregards as unimportant. This can be a question on the safety of using AI if the application is simplistic or the gender balance among the engineering team. There can be many questions that can catch the interviewees off-guard so it is beneficial to practise them.
Prepare Standard Answers
There are many questions that will certainly be asked (i.e. business model, traction, non-bankability, risk, …). While it is not possible to know all questions in advance, one should script out the answers to questions that have a high likelihood of being posed. The same is true for all questions that have been revealed as critical during the practice sessions.
Demeanour of the Answering Person
Depending on the personality of the interviewees, there can be issues that should be addressed in advance. These can be dismissive body language, disengagement from the conversation (i.e. turning away, sighing) or a generally combative nature when faced with criticism.
While the pitch preparation will not be comprehensive enough to change such long-standing habits, it is beneficial to avoid negative body language during the interview.
Short Answers to Pre-Empt Interruptions
A general rule for the EIC Accelerator Q&A is:
There will be more questions than answers.
Often, answers are too elaborate or aim to explain too many things before getting to the point. This will prompt the questioners to keep interrupting and ask follow-up questions because, while the pitch time limit of 10 minutes can be stressful for the interviewees, the Q&A time limit of 35 minutes can be stressful for the jury.
The interviewees are only focusing on presenting their project but the jury members have the difficult job of making a significant funding decision within only 45 minutes. If answers are too long and never get to the actual question then this might frustrate the jury members – something that should be avoided. If you are asked a specific question then answer it briefly first and only then elaborate.
If you are interrupted while you elaborate then you have at least given a short but precise answer in the beginning already. If the brief answer were to be missing and you are interrupted by a follow-up then this would mean that the question was not answered at all.
Have fun. While being nervous (or excited) is normal in a stressful situation, one should always remember to have some enjoyment for the process. One must have the attitude: “I am happy to explain what we do to an interested audience.” While the jury will heavily assess the technology and suitability of the project for the EIC, it will also be screening the team and its motivation. Both aspects can make or break a funding decision which is why developing some natural enthusiasm is essential.
- EIC Accelerator Interview Preparation Process: Scripting The Pitch (Part 1)
- EIC Accelerator Interview Preparation Process: The Importance of the Q&A (Part 2)
- EIC Accelerator Interview Preparation Process: Jury Considerations (Part 3)
These tips are not only useful for European startups, professional writers, consultants and Small and Medium-Sized Enterprises (SME) but are generally recommended when writing a business plan or investor documents.
Deadlines: Post-Horizon 2020, the EIC Accelerator accepts Step 1 submissions now while the deadlines for the full applications (Step 2) will be on March 16th 2022, June 1st 2022 and October 5th 2022 under Horizon Europe. The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.
Contact: You can reach out to us via this contact form to work with a professional consultant.
EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).
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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:
- EIC Accelerator Interviews: Pitch Deck vs. Proposal Documents (SME Instrument)
- Choosing a Good Project for the EIC Accelerator (SME Instrument Phase 2)
- The EIC Accelerator Budget: Grant vs. Blended Finance (SME Instrument Phase 2)
- EIC Accelerator – Introduction and Blended Finance (SME Instrument Phase 2)
- EIC-Accelerator Writing: Providing the Missing Link (SME Instrument Phase 2)
- The Biggest Mistakes When Applying to the EIC Accelerator (SME Instrument Phase 2)
- Identifying a Broad Vision for an EIC Accelerator Project (SME Instrument Phase 2)