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.
The European Commission (EC) and the European Innovation Council (EIC) have always aimed at optimizing and adapting the EIC Accelerator (formerly SME Instrument Phase 2, grant and equity financing) proposal template and application process to further reduce the workload on both applicants and evaluators. Still, due to its comprehensive requirements, startups and Small- and Medium-Sized Enterprises (SME) have always had difficulties in writing an application in-house and have tended to seek professional help by hiring a writer or consultant who can facilitate this process (read: Hire a Professional Consultant).
Restricting Access to Funding Through Complexity
While great improvements have been made in this regard through the European Agency for SME’s (EASME) which rapidly performs remote evaluations and the introduction of in-person pitch interviews in Brussels or remote video-calls, an EIC Accelerator proposal has always been hard to evaluate and even harder to prepare. Applications have a very high information density and force the management team of the company to either spend many weeks and months on perfecting an application or seek external help.
As a result, companies that do not have the time or resources for such an effort were unable to apply in the past. To combat this significant investment-obstacle and lower the barrier to entry for future grant beneficiaries, the EIC has tried to develop new strategies for improvements but such measures have so far only increased the burden on both SME’s and evaluators (i.e. additional pitch interviews, financial documents, pitch deck, etc.).
Even the new progressive changes introduced for the EIC Accelerator in 2021 are adding a third evaluation step to the process which significantly increases the applicant’s skill-set-requirements (i.e. writing, speaking and video production) and workload not only for the proposal preparation but also for the planning of this complex procedure (read: 2021 Application Process). From the perspective of the European Union (EU), it is in a double bind since a more complex process will always present a barrier for great companies that want to focus on product developments rather than content production while an oversimplified process will increase the risk of miss-funding unsuitable projects.
Attempting to optimize such a high-stakes process is difficult since, for example, a 30-page proposal will always exhibit a high information density because the grant financing is just too competitive too not utilize the maximum space available. If the rules state that a 30-page application can be prepared, then this maximum will always be the norm and if restrictions are not enforced (i.e. font-size, margins, using the annexes for content) then it will always be difficult for innovative start-ups and SME’s to compete with professional grant writers.
The Evaluation Process
So far, the EIC is adding more and more layers to the application process (i.e. interviews in 2018 and a pre-application in 2021) but this will make it harder for applicants and not easier. The more layers there are to pass through, the less confidence startups will have in their success and the more discouraged they will be to apply in the first place. The fewer steps an applicant is presented with, the more beneficial it will be for them but it will also present a challenge to the evaluations since it is difficult to fully assess a project with less information.
A Linear vs. Convergent Process (Knock-Out Elimination)
In 2020, each written application was evaluated in isolation until the final pitch interview where approximately 25% to 50% of applicants were selected from a pool of presenters by a jury. This process can be viewed as a linear proposal evaluation for step 1 (i.e. written applications are graded individually, then ranked) and as convergent for the step 2 pitch (i.e. the best will win in comparison). The convergent part was only introduced recently but it displays an interesting approach for what the EIC Accelerator could look like in the future whereas it can be feasible to compare projects quickly rather than aiming to evaluate them individually.
The EIC Accelerator could create an evaluation process with elimination rounds where a certain budget is agreed upon for specific categories (i.e. energy, health, space, etc.) and the applicants can then apply to such specific calls whereas their proposals are randomly matched with other applicants to identify superior projects. Just like the current method, evaluating applications in such a way has its limitations and potential problems (i.e. unfair matching, bad luck) but it would be much faster for the evaluators and could also reduce the time invested in proposal writing.
Most prominently, a convergent approach fixes one of the core issues for the evaluation process:
Instead of identifying which project is ‘worthy’ of funding (i.e. too many applicants are), the EIC can directly identify the companies that are ‘more worthy’ without wasting the time of the applicants.
Currently, the EIC is spending a lot of time and resources on assessing the worth of each individual company but, in the end, the relative worth is all that matters (i.e. as seen in the pitch interviews). A convergent process with knock-out elimination-rounds is an evaluation that keeps the end in mind and reduces needless assessments which are not providing any feedback to rejected companies anyways.
A single knock-out round would reduce the number of applicants by 50% (i.e. 6,000 to 3,000) while a second round would reduce it towards 25% (i.e. 6,000 to 1,500). Variations can also reduce these numbers faster when 3 projects are compared in one round, yielding 33% (i.e. towards 2,000) and 11% reductions (i.e. towards 667), respectively.
These tips are not only useful for European startups, professional writers, consultants and Small and Medium-Sized Enterprises (SME) but are generally recommended when writing a business plan or investor documents.
Deadlines: Post-Horizon 2020, the EIC Accelerator accepts Step 1 submissions now while the deadlines for the full applications (Step 2) will be on June 16th 2021 and October 6th 2021 under Horizon Europe. The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.
Contact: You can reach out to us via this contact form to work with a professional consultant.
EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).
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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)