The EIC Accelerator funding (grant and equity, with blended financing option) by the European Commission (EC) and European Innovation Council (EIC) is designed for startups and Small- and Medium-Sized Enterprises (SME) and provides €2.5 million in grant and €15 million in venture financing per project.
This article investigates the importance of timing and market alignment to assess the future potential of a company.
Timing is Everything
The EIC is generally looking for dynamic companies that are young (i.e. 50% are under 10 years old), timely and have high growth potential. Since timing is a critical component of every new technology development and commercialization, an EIC Accelerator project should generally present a time-limited opportunity to invest in the next big thing.
The timing will often be influenced by factors such as regulatory trends (i.e. climate change), new technology breakthroughs (i.e. scientific developments) or an increased consumer and market demand (i.e. semiconductors).
As a result, timing is generally a critical component since it means that there is a strong reason to assume that there will be a significant business opportunity and product market fit in the future even if the company is in the early stages and revenues have remained elusive.
The Living Dead
In contrast to the case described above with excellent timing, there are companies that have been around for a long time, have been continually developing a new ground-breaking technology and have filed an endless number of patents to support their commercial exploitation but without a clear product-market fit.
There is no real timing for their solution, no apparent market need and no regulatory pressure to implement the product.
Additionally, they often have a track record of starting and stopping their developments based on their funding status whereas a new fund-raising round will spring a phase of excitement followed by months or years of silence once the funding runs out.
And the technology developments are never quite finished.
Traction: A Zombies Cryptonite
Obtaining early revenues is not always feasible, especially in medical technology or hardware-heavy industries where certifications and regulatory clearance are essential but a company should aim to generate revenues as quickly as possible.
If a company has a finished prototype that can be commercialized to some degree then they should aim to generate revenues as quickly as possible to validate the product-market fit. If a product can be purchased but is not in demand then this generally reveals a poor investment opportunity.
Alternatively, the first step can also consist of prototype testing with customers or end-users to demonstrate the market need and usability even if no revenues are generated. But this should not be an excuse to hand out the product for free since no customer would buy it.
Zombie Innovation
Zombie Innovators generally lack the commercial expertise, customer demand or market incentives to generate any traction which leads to a bottomless budget for research and development that every investor will stay away from.
In their business plans, such companies will often highlight their technology, Intellectual Property (IP) and related benefits (i.e. sustainability, energy, costs) but they will rarely mention customer demand or pilot customer negotiations.
Any commercial plan will likely be reduced to the inflated market size with little or no practical plan to reach it or evidence that the market has an interest in the product.
Do Not Bite the Zombie
As a consultant, professional writer or freelancer, it is essential to identify Zombie Innovators quickly and to assess their level of traction as well as their utilization of past financing, especially when targeting the EIC Accelerator program. If investors avoid such businesses then so will the EIC Jury.
Even if early revenues are impossible, there should be an extensive number of customer relationships, early testing with end-users, agreements with value chain stakeholders and impressive Letters of Intent (LOI) to demonstrate the market need.
Zombie Innovators generally have none of these.
This article was last modified on May 26, 2023 @ 14:03
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
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.
“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:
Maximize success for political appearances (i.e. unicorns, centaurs, follow-up funding)
Focus on high-risk DeepTech
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) by the European Innovation Council (EIC) and European Commission (EC) has a clear focus on high-risk startups with high commercial potential. It is ideal for startups and Small- and Medium-Sized Enterprises (SME) since the funding per project can reach €17.5 million in total (€2.5 million in grant and €15 million in equity) and is ideal to finance scale-up activities.
The EIC Accelerator grant proposal template is very detailed and specific with multiple questions aiming to gauge the level of innovation and disruptiveness of the presented technology. Due to the complexity of these grant proposal templates, startups often rely on freelancers, professional writers or consultants to support the development of the documents.
This article provides a simple guide for prospective applicants regarding the development of Unique Selling Points (USP).
Developing Unique Selling Points (USP)
One of the EIC Accelerator proposal sections is dedicated to the USP’s of the company’s product or service which is an essential part of identifying the commercial impact of the technology.
Startups often struggle with such definitions since many EIC Accelerator applicants are in the early stages (i.e. Technology Readiness Level 5/6 – see TRL) with many companies being pre-revenue and pre-product-launch.
Starting With the Innovation
The USP’s are often at the intersection between the innovativeness of the company’s technology, the business model and the market’s current offerings.
Begin by listing 1-5 unique technological features that you view as the core innovation of your product or service. These are technical mechanisms of your hardware, software features or any other unique aspect of what your technology is capable of while current market alternatives fail to offer them.
It is recommended to try and focus only on the most innovative aspects of the technology and to keep them clear and to the point rather than trying to inflate them through using as many small features as possible.
The following questions will help to focus on the most innovative features since the less innovative components will likely fail to produce suitable answers. For each of the listed technological features, answer the questions below so that each feature is going through all questions in succession:
Question
Innovation 1
Innovation 2
Innovation 3
Why does your technology have this feature but not others?
Is it hard to copy?
Is it patentable?
How do you quantify the benefit per unit? (i.e. 50% less time-spent or €50K lower costs per device)
What does this benefit mean for your customer? (i.e. €250K saved p.a. and 100 MWh of additional capacity)
1. Why does your technology have this feature but not others?
Explain why you were able to achieve this technology milestone or develop this feature and why other companies or institutions have failed. This question is aiming to identify why it is new and why this product or service does not exist on the market.
If the answer is a technical innovation, a high level of complexity or any other undeniable head-start then this question will have a positive answer. If the answer is vague as in “no other company has tried this yet” or “other companies could create it but do not view it as valuable” then this is not a promising innovation.
2. Is it hard to copy?
This is a core question that any evaluator or jury member will be interested in. If we invest in you, will you be able to guard your Intellectual property (IP) and capitalize on it?
For this question, it is useful to identify under which conditions competitors could copy your solution and what their limitations are. How many years would it take? Are there IP barriers? How much financing would a competitor need to copy you?
3. Is it patentable?
For any DeepTech company with long development times, IP is a very important factor. Can this particular feature be IP protected, globally? If not, how can you assure that the IP remains in-house and does not leak out?
Software is often more difficult to patent than hardware in the European Union (EU) but it is important to have a clear IP protection strategy regardless since this is a core technology feature that the entire business model will stand on.
4. How do you quantify the benefit per unit? (i.e. 50% less time-spent or €50K lower costs per device)
Quantifications are the flavor of every EIC Accelerator application and any investor presentation. Without it, all a company is presenting is a story. Quantifying the business model, the technology benefit, the customer interest and the product-market fit are essential.
For this question, answer what exactly the benefits are over conventional alternatives for each feature. Compared to what exists on the market, how is your feature better? How can you quantify this benefit? Does this benefit also apply to direct competitors with similar technologies?
5. What does this benefit mean for your customer? (i.e. €250K saved p.a. and 100 MWh of additional capacity)
This is a key question that can often be neglected. Just because your feature can reduce the time spent on a certain production task or the costs of a device does not explain what this means for your customer. Maybe the time reduction is irrelevant since the time savings of 50% only add up to 5 seconds since the production step is simple. Maybe you save your customer 5 months with this feature.
Quantify the benefit by using a pilot customer or imaginary customer as an example. If they implement your product, they can reduce the production time by 50% which means that a 20-hour production process now only takes 10 hours. For that particular customer, €500K are saved annually if they produce 1,000 devices a year.
Not every benefit has to be financial but it is still advisable to create a financial assessment regardless. Emission savings can be expressed financially due to carbon taxes. Improved workflows can likewise be expressed financially since they will impact productivity.
Conclusion
This simple list allows you to identify the USP’s of a multi-faceted project and should yield a table where every feature has answered every question.
For less unique features, the questions will be difficult to answer and these should not be counted as unique selling points for the EIC Accelerator. It is also possible that a single feature (i.e. the automation of a certain task) can lead to multiple USP’s.
This article can act as a good starting point to clarify and brainstorm on the unique components of a product or service.
This article was last modified on Apr 25, 2023 @ 18:54
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
The EIC Ecosystem
In 2021, it was leaked that the EIC is aiming to create an ecosystem not only for DeepTech companies but also for investors, consultancies, coaches and other relevant stakeholders.
“The idea of the platform is to allow […] any applicant at a given moment where he needs […] support from someone […] access to an ecosystem platform […] where he will find different actors but also those private companies, consultants who want to partake into the exercise to be referenced in this in the system and to offer their service. Now, they will have to pay something, a fee to be referenced.”
While the vision of a subscription-based service might still be far in the future, its first iteration is on the way.
“From 2023, the EIC BAS services will be expanded through EIC Ecosystem Partners which can include, for example, investors, business angels, mentors and coaches, innovation agencies, business associations, clusters, accelerators, incubators, technology transfer offices, venture builders, etc. EIC BAS services provided by Ecosystem Partners includes access to existing incubation and acceleration programmes as well as services specifically designed in collaboration with EIC.”
Especially the search for co-investors is an exciting prospect for applicants since it can help them gain access to EIC Financing without being forced to find private lead investors by themselves.
“The EIC will also continue to directly manage a core set of business acceleration services which provide a clear added value, which include: A platform for EIC Accelerator companies in receipt of equity investment to find co-investors”
Fast Track and Pilot Plug-in Schemes
The EIC’s 2023 Work Programme continues to offer fast-track and plug-in schemes whereas a company funded under specific EU grant or equity financing projects can cross-migrate into the EIC Accelerator application process without having to start from scratch.
“Full proposals to the EIC Accelerator stemming from the Fast Track scheme will be assessed as set out in Section IV, and will be treated in exactly the same way as all other full proposals.“
“In 2023, the funding bodies and schemes which are eligible for the Fast Track for EIC Accelerator cut-off dates are:
The EIC Pathfinder and EIC Transition projects (including under EIC pilot);
The Knowledge and Innovation Communities (KICs) supported by the European Institute of Innovation and Technology (EIT);
The Eureka secretariat for SMEs supported under the Eurostars-2 Joint Programme and the Partnership on Innovative SMEs;
Companies supported by the WomenTech.EU programme.”
“Under the Plug-in scheme, applicants do not apply directly to the EIC Accelerator call (Section IV). Instead, a project review is carried out by the certified national or regional programme to assess the innovation or market deployment potential of an existing project supported by the programme, and to decide whether the project is suitable for support under the EIC Accelerator.”
Both mechanisms seem beneficial to applicants on the surface but they are, unfortunately, of limited use. Fast track and plug-in schemes only allow applicants to skip the first of the three evaluation steps (i.e. the Step 1 short application) but this is also the easiest step in the entire process.
If a company can skip Step 1 which consists of a pitch deck, a video and a written proposal then this also means that there is no video for the project that the Step 2 evaluators and the Step 3 jury can look at which can be a disadvantage (read: EIC Accelerator Pitch Video).
Of course, a company can decide to upload a Step 1 video retroactively even if they have been allowed to skip this step which is highly recommended.
“Applicants will then be invited to prepare a full proposal for the EIC Accelerator to one of the cut-off dates within the next 12 months following initial review. […] Full proposals to the EIC Accelerator stemming from the Plug-in scheme will be assessed as set out in Section IV (above) and will be treated exactly the same way as all other full proposals.”
Note: The term “full proposal” refers to the Step 2 application consisting of a detailed business plan.
What further questions the usefulness of the fast track and plug-in programs is the fact that the Step 2 application re-uses a substantial amount of the text from the Step 1 application. In fact, one can use 100% of the text written in Step 1 for the Step 2 application which means that, even if a company skips Step 1, they still have to fill all of these Step 2 sections from scratch.
Considering the limited effort required for the preparation of a Step 1 proposal, their high success rates and the fact that the text, video and pitch deck would need to be prepared for Step 2 anyways, the fast track and plug-in schemes are of little practical benefit. An exception would be a case where a company has significant time restrictions and must unlock the Step 2 EIC Accelerator template in the online platform as soon as possible to meet the next cut-off.
Outlook
A truly useful fast track or plug-in scheme would allow a direct application to the Step 3 interviews especially if the plug-in scheme has already performed additional due diligence on the project specifically for the EIC Accelerator. Step 2 is the most difficult step of the EIC Accelerator program but it is understandable that the EIC aims to retain the integrity of the full application process since it could otherwise compromise the quality of projects reaching the Step 3 interviews.
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 19:12
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
The EIC Accelerator Open and Strategic Challenges
The 2023 Work Programme of the EIC is outlining the newest Strategic Challenges for the EIC Accelerator. These are renewed every year alongside the new Work Programme implementation and have separate allocated budgets. It is common that the EIC Accelerator Open and the EIC Accelerator Challenges have a comparable budget while the chances of success could be higher in the thematic challenges due to the strict topic limitations.
This is due to the smaller number of applicants compared to the EIC Accelerator Open which has no thematic restrictions but this might be irrelevant since the EIC has announced that the Strategic Challenges budget will be transferred to the EIC Accelerator Open if there are not enough applicants available. Of course, the applicants for the Strategic Challenges still retain first priority for their respective budgets.
“However, if there is insufficient applications selected for funding for a Challenge, the budget will be transferred to the other Challenges. In case there is insufficient applications selected for all the Challenges, the remaining budget will be transferred to the Accelerator Open.”
As given in the EIC’s draft Work Programme 2023, the seven new EIC Accelerator Challenges are:
Challenge 1: Novel biomarker-based assays to guide personalised cancer treatment
Specific objectives
“The overall goal of this Challenge is to support and accelerate the preclinical validation and/or clinical phase 1 work carried out by innovative SMEs (including start-ups, spinouts) and small midcaps to develop novel predictive, prognostic and companion diagnostic assays to guide cancer treatment. This Challenge has the following specific objectives:
develop novel companion diagnostic assays , including through liquid profiling; to identify who, among cancer patients, is more likely to benefit from a given treatment (guided treatment);develop novel predictive biomarker-based assays to identify who, among patients with potentially precancerous lesions, is more likely to develop cancer;
develop novel prognostic assays including through liquid profiling to identify who, among the cancer patients who underwent treatment, is more likely to recur;
develop novel companion diagnostic assays, including through liquid profiling to identify who, among the cancer patients receiving treatment, is more likely to develop side effects as a result of the treatment and
to develop novel monitoring biomarker-based assays to effectively monitor the clinical course of the disease.”
Expected outcomes and impacts
“As expected outcomes from this Challenge, clinicians will be able to:
Identify, who among cancer patients, is more likely to benefit from a given treatment (guided treatment)
Identify, who among patients with potentially precancerous lesions, is more likely to develop cancer
Identify, who among the cancer patients having underwent treatment, is more likely to recur
Identify who among the cancer patients receiving treatment, is more likely to develop side effects as a result of the treatment, affecting their quality of life and
More effectively monitor the clinical course of the disease”
Challenge 2: Aerosol and surface decontamination for pandemic management
Specific objectives
“The proposals should target the development and commercialisation of technological solutions facilitating social interaction in the context of pandemic emergencies, by means of one or more of the three following approaches:
Full systems for high-efficiency aerosol capture, pathogen deactivation and air circulation management in closed-environments (e.g., office space, in-flight, retail stores, etc.), including advanced air-filtering architectures and dynamic air circulation optimisation.
Next-generation face mask technologies with smart filtration materials to exceed N95 performance at low airflow resistance, with improved retention/rejection of sub-micron particles.
Rapid surface decontamination devices beyond state-of-the-art UV-C irradiation systems and biocidal agent dispersion.
Where advantageous, pathogen profiling sensors and sub-systems could be integrated with air renewal systems, face masks or surface decontamination devices to provide quasi- real-time information on pathogen presence for rapid decision making and/or autonomous optimisation of air circulation.
The proposals should provide preliminary evidence demonstrating that social distancing can be avoided or substantially reduced, under realistic pathogen infectivity assumptions, with the targeted technologies.”
Expected outcomes and impacts
“By reducing the need for social distancing in the event of infectious pandemics, this Challenge will empower society at large to sustain unaltered economic and social dynamics in the event of pandemic outbreaks.”
Challenge 3: Energy storage
Specific objectives
“This Challenge targets groundbreaking innovations in any field of technology that have a high potential to meet the following goals:
to store electric and/or thermal energy at low cost, high density, high charging/discharging efficiency and enhanced durability.
technological approaches (chemical, electrical, electrochemical, mechanical, thermal) for energy storage at different scales (centralized at large industrial facilities premises or distributed and at small scale level – mobile electronics), duration (short – millisecond to day, medium – days to month and long term – months to seasons) and uses (from stationary to mobile).
technologies that, without using critical raw materials or ensuring their full recycle/reuse, minimize their carbon footprint measured through a life-cycle analysis (including cost and social impact evaluation). The proposed technologies could also address the smart operation and control of storage assets, their integration with demand response strategies, predictive maintenance, load forecasting and decentralized renewable energy technologies.”
Expected outcomes and impacts
“The possibility to store electrical or thermal energy at low cost, high density, high charging/discharging efficiency and for different duration (from short to long) will:
enable a strong penetration of intermittent renewable energy resources by addressing the spatial and temporal mismatches between generation and demand,
set up decarbonized, interconnected, sector-coupled and flexible energy systems.
Increase Europe’s energy independence from unreliable suppliers”
Challenge 4: New European Bauhaus: Digitisation for sustainable and inclusive built environment
Specific Objectives
“The call aims to enable a paradigm by supporting deep tech ventures that can deliver disruptive new products and services for a digitised value chain with a focus on:
Computational design. ventures that develop and scale radical new products for mass-adoption of parametric, generative and algorithmic design, pushing the boundaries of physical simulation, digital twin;
Alternative materials. ventures active in the development, production, advanced application of alternative building materials, or building concepts, building elements, design+fabrication concepts (e/g stereotomy 2.0) based on advanced uses of alternative materials.
Digital fabrication. ventures developing and commercializing scalable 3Dprinting, robot assisted composites, factory and field robotics, automation products, digital molds, distributed building factories.”
Expected Outcomes and Impacts
“The overarching objective of this Challenge is to provide transformative digitally enabled solutions for the construction sector that can help it achieve climate neutrality while providing inclusive and high quality products.
The focus will be on achieving a reduction in embodied rather than operational carbon emissions. Socio-economic impacts include higher productivity, higher product quality, reduced material consumption and waste, improved construction logistic in the urban environment and increased economic impact without compromising on quality or safety.
This approach will also lead to higher quality jobs in a more progressive and appealing sector that can deliver a step-change in the overall quality of the social experience with the built environment.”
Challenge 5: Quantum computers hardware and real environment quantum sensors
Specific objectives
“The objective of this Challenge is to support ground-breaking innovations that have a high potential to develop:
significantly simplified QC integration with control electronics;
scalable control systems (scalable to tens of thousands of qubits, needed for meaningful practical applications);
Quantum sensors to function in real/harsh environment for various application areas, such as ecotoxicology, pharmaceuticals, biomedical, space, corrosion detection in power plants, gas/oil tanks, raw material detection, medical imaging, automotive and many more.”
Expected outcomes and impacts
“This Challenge is expected to support EU in taking a leading role in the development of cutting edge quantum computing and quantum sensors that can be used in real environment and deployed in various areas such as medical devices, pharmaceuticals, materials science, defence, space, etc.
In mid and long term, this challenge is expected to expand the quantum capabilities of Europe, underpin its economic resilience and digital sovereignty. It should pave the way for Europe to be at the cutting edge of quantum capabilities by 2030 as envisioned by the 2030 Digital Compass: the European way for the Digital Decade.”
Specific conditions
“Applications to this EIC Accelerator Challenge may request an investment component of above EUR 15 million in duly justified cases.”
Challenge 6: Sustainable and resilient agriculture
Specific objectives
“Design, development and evaluation of interdisciplinary solutions for regenerative agriculture and soil health in the areas of
Fertilisation
Crop protection
Irrigation
Tillage
Soil and crop management
Radical innovations in precision fermentation for the food sector, including but not limited to mycoproteins.
Radical innovations in the area of natural solutions for carbon management and valorisation (carbon farmingcarbon stock in the soil, etc)
Novel processes, materials, equipment, crops and microorganisms adapted to harsh environments, climate adaptation needs and resource scarcity.”
Expected outcomes and impacts
“This Challenge aims to improve the resilience and security of the European food supply chain, notably by maintaining and improving crop yield with environmentally friendly technologies, all while regenerating and increasing soil health. By aiming to valorise crop residues, this Challenge also aims to contribute to better carbon and nitrogen management practices, to mitigate climate change.
In doing so, the results arising from this challenge will foster the EU technological autonomy and leadership via focused support of innovations in the areas of sustainable and resilient agricultural production, food security, biodiversity and environmental protection. The challenge also aims to reduce the EU dependency from critical supply chains and strengthen the EU innovation ecosystem competitiveness in the strategic sectors of ecologic transition and clean, secure and cheap energy provision.”
Challenge 7: Customer driven, innovative space technologies and services
Specific objectives
“The overall goal of this challenge is to ensure Europe is able to service and protect its own Space infrastructure, avoiding the risk of losing its strategic autonomy over its own space assets, while enhancing the competitiveness of its space industry through encouraging the emergence of innovative, interoperable, scalable, and autonomous “customer-driven” innovative space technologies.
In terms of technological developments, the specific objectives of the call are:
To have the means to inspect spacecraft in orbit, to augment satellite capabilities and resilience;
To develop autonomous and in-space collision avoidance capabilities e.g., use of AL/ML for collision avoidance manoeuvres, space debris positioning data and develop in-space mobility propulsion capabilities;
To further mature self-assembly of spacecraft in orbit with different applications (e.g., in-orbit, cis-lunar exploration, Earth observation, space debris inspection, space situational awareness, etc.);
To collect and recycle space debris or recovering intact components from nonoperational satellites or cut dysfunctional satellites turning them into metal rods for potential fuel;
To refurbish upper stage of launchers and transform them into microgravity platforms;
To design and construct a R&I low Earth orbit unmanned modular platform assembled in orbit and to host in-orbit microgravity experiments or collect/reuse space debris;
To develop innovative technologies for Earth observation, navigation, satellite communications (SATCOM), space science, space situational awareness (SSA) and in-space logistics needing in-orbit demonstration and in-orbit validation (IOD/IOV).”
Expected outcomes and impacts
“This Challenge aims at developing:
an EU servicing and re-use/recycling capability for servicing EU space infrastructure, while contributing to the management and reduction of space debris;
timely and cost-effective Space Traffic Management services for on-time collision avoidance manoeuvres;
the re-use, refurbish or recycling of a spacecraft components or launchers upper stages scientific and technological solutions for in-orbit services and reuse/ refurbishing and recycling of old spacecraft (e.g. satellites, rockets upper stages, etc.);
Innovative propulsion solutions for in-space mobility of spacecraft”
Specific conditions
“Where relevant, companies supported under this Challenge will have access to in-orbit demonstration and testing facilities financed under Horizon Europe.”
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 10:18
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
Evaluation Criteria for the Short Application (Step 1)
The evaluation criteria for the EIC Accelerators short application have remained largely consistent whereas the 2023 EIC Work Programme outlines the following scoring criteria for Step 1 applications.
1. Excellence
Breakthrough and market creating nature: Does the innovation have a high degree of novelty – compared to existing products, services and business models – with the potential to create or significantly transform markets?
Timing: Is the timing right for this innovation in terms of market, user, societal or scientific of technological trends and developments?
2. Impact
Scale up potential: Does the innovation have scale up potential, including the potential to develop new markets and impact on the growth of the company? Does the company show a clear and convincing vision, taking into account its current level of development and maturity, in relation to the targeted market, the business model and growth forecasts?
Broader impact: Will the innovation, if successfully commercialized achieve positive broader societal, economic, environmental or climate impacts?
3. Level of risk, implementation, and need for Union support
Team: Does the team have the capability and motivation to implement the innovation proposal and bring it to the market? Is there a plan to acquire any critical competencies which are currently missing, including adequate representation of women and men?
Complaints and Rebuttals for Step 1 Rejectees
In 2021, the EIC has made a significant step towards transparency by allowing all EIC Accelerator applicants to view comments from the evaluators who have reviewed their proposals. While this is of tremendous benefit to applicants, it has likewise exposed a certain degree of randomness in the way applications are graded including mistakes, negligence or plain ignorance.
This is, of course, to be expected and only natural when facing thousands of applications and multiple reviewers per proposal. Still, this has inevitably led to complaints regarding specific Evaluation Summary Reports (ESR) and especially the remote evaluators.
While the EIC has tried to investigate such complaints in the past, the vast majority of applicants were simply told to re-apply to the next cut-off and summarize their rebuttal in the resubmission of their proposal (i.e. via the email of the European Innovation Council and SME’s Executive Agency: support@eic.eismea.eu).
The new 2023 Work Programme is outlining the conditions for issuing a formal complaint as opposed to relying on the resubmission of rejected Step 1 proposals.
“You may file a complaint if you believe that the evaluator(s) made an incorrect assessment on the following grounds:
a factual mistake;
absence of information which is not required at short proposal stage; and
a manifest error of appreciation on the scope and purpose of the Accelerator.”
Unfortunately, this has only limited use since the EIC Accelerator’s Step 1 is by far the easiest step. If the same rule was applied to Step 2 full applications then the EIC would likely find themselves with a valid complaint for the majority of rejected applicants since it is common to encounter at least one factual mistake in any given Evaluation Summary Report (i.e. misreading Letters of Intent, Freedom to Operate analyses or missing critical information).
In case a rejected Step 1 application is retroactively given a GO grading (i.e. passing the step successfully) then they are able to apply to Step 2 at the original deadline that was reachable in their previous submission.
“If your proposal is reevaluated as a GO, you will be eligible to introduce your full application to the same cutoff date that you would have been able to submit to, with a GO from the initial evaluation.”
This second quote from the EIC’s 2023 Work Programme draft is obscure but this can be understood as the EIC allowing Step 2 applicants to hand in applications past the deadline in case a complaint was approved. But this seems unrealistic due to time constraints in the preparation of Step 2 applications and the limited time window of the evaluation prior to the fixed interview deadlines.
Evaluation Criteria for the Full Application (Step 2)
For the EIC Accelerator’s Step 2, the evaluation criteria are defined as follows
1. Excellence
Breakthrough and market creating nature: Does the innovation have a high degree of novelty, compared to existing products, services and business models, with the potential to create or significantly transform markets?
Additional sub-criterion for EIC Accelerator Challenges ONLY: How relevant are the proposal objectives in contributing to the specific objectives of the Challenge?
Timing: Is the timing right for this innovation in terms of market, user, societal or scientific of technological trends and developments?
Technological feasibility: Is the innovation based on a technology or technologies that have been adequately assessed at least in a laboratory environment and relevant environments to characterise the potential and assess the level of risk (at least TRL 5/6)? Is the technology developed in a safe, secure and reliable manner?
Intellectual Property: Does your company have the necessary Intellectual Property Rights to ensure freedom to operate and adequate protection of the idea?
2. Impact
Scale up potential: Does the innovation have scale up potential, including the potential to develop new markets and impact on the growth of the company? Are the associated financial needs well assessed and realistic?
Broader impact: Will the innovation, if successfully commercialised achieve positive broader societal, economic, environmental or climate impacts?
Additional sub-criterion for EIC Accelerator Challenges ONLY: Does the proposed application have the potential to contribute to the expected outcomes and impacts set out in the Challenge?
Market fit and competitor analysis: Has the potential market for the innovation been adequately assessed, including conditions and growth rates? Has a competitive analysis been thoroughly performed, including identification of potential customers and relevant types of users, including women and men, definition of unique selling points and key differentiation from competitors?
Commercialisation strategy: Is there a convincing and well thought-through strategy for commercialisation, including regulatory approvals/compliance needed, time to market/deployment, and business and revenue model?
Key partners: Have the key partners required to develop and commercialize the innovation been identified and engaged, including their roles/competences and a sufficient level of commitment and incentivisation?
3. Level of risk, implementation, and need for Union support
Team: Does the team have the capability and motivation to implement the innovation proposal and bring it to the market? Is there a plan to acquire any critical competencies which are currently missing, including adequate representation of women and men?
Milestones: Is there a clear implementation plan with defined milestones, work packages and deliverables, together with realistic resources and timings?
Risk level of the investment: Does the nature and level of risk of the investment in your innovation mean that European market actors are unwilling to commit the full amount alone? Is there evidence that market actors would be willing to invest, either alongside the EIC or at a later stage?
Note: Small mid-caps will be expected to provide documentary evidence that their bank has refused the financing needed for the project.
Risk mitigation: Have the main risks (e.g. technological, market, financial, regulatory) been identified, together with measures to take to mitigate them?
Step 3 Interview Criteria
For the Step 3 interviews, the same vague criteria used in the previous iterations of the EIC Accelerator apply (read: How to Prepare for the Interview). An interesting feature of the Step 3 interviews is that the EIC Jury can consult external analysts who will assess the project prior to the interview.
“Jury members will also have access to analyses (for example on financial metrics) generated by the EIC AI-based platform and in certain cases the independent assessment of a specialised expert in the field of science or technology. Such analyses will be made available to applicants after the decision.”
This might provide only limited usefulness since it would be more beneficial to make the scientific and technical aspects a fundamental part of the Step 3 selection rather than an optional add-on.
Otherwise, a groundbreaking battery startup without revenues or customer commitments could consistently lose against a software company with excellent financial health and competitive advantages but only limited technological or scientific breakthroughs. In the same way, a scientific team with only 2 or 3 employees will have a difficult time convincing the EIC Jury while a technical Jury member might be impressed by the technology and achievements while being more optimistic.
Through the outsourcing of the EIC Fund’s management to the European Investment Bank (EIB) and Alter Domus (Luxembourg), the EIC could become more risk-averse and, while it claims to fund DeepTech at TRL5, it might end up only picking projects that are already in the market or have significant customer commitments.
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 10:17
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
Cancelling Approved EIC Accelerator Funding
Horizon 2020 has been plagued by a variety of high-profile fraud cases such as two companies which were beneficiaries of 56 projects funded under the EU’s FP7 and/or Horizon 2020 research programmes. It is only natural that the EIC has implemented clauses which enable them to cancel issued grants or to decline an investment in case certain inconsistencies are encountered during the due diligence.
“In such a case, the Commission may also request amendments or, in the cases of misrepresentation, submission of false information, non-submission of information, suspicion of fraud or any other ground listed in the EIC Accelerator contract, it may terminate your initial EIC contract covering the grant component. The EIC Accelerator contract may also be terminated if the non-investment is likely to affect the implementation of the action or puts into question the decision awarding the financial support.“
For applicants, this presents a certain risk since it is known that the European Investment bank (EIB) and the EIC are very slow when it comes to the issuance of equity investments (read: Inside the EIC Fund). If a company has requested blended finance and is asked to stay in the due diligence process for 12 months, then they might decline the EIC Fund investment but this could jeopardise their received grant financing according to the EIC.
The EIC should make an official and binding commitment that, if an applicant is well-financed from other sources (different from the EIC), they should be allowed to decline the EIC Fund investment while retaining the grant. This should be a company’s right if the due diligence by the EIB is too slow for the speed at which a company has to perform. Slow due diligence can even be detrimental to the company’s financial health if other investors could act faster.
Converting Funding Requests
The EIC’s 2023 Work Programme outlines the option for a conversion of funding modalities whereas the Step 3 EIC Jury can decide that the requested amount or funding type, which has passed Step 1 and Step 2 already, is inappropriate and can change it on-the-fly.
This likewise expands towards the EIC Accelerator Open and Strategic Challenges as well as the funding modes, namely grant-first, grant-only, equity-only and blended financing.
For the EIC Accelerator Open and Strategic Challenges, the Step 3 jury and the Step 2 evaluators can make changes to the proposal:
“If in the course of the interview the jury assesses that your proposal falls within the scope of one of the Accelerator Challenges which is open at the cutoff and meets the relevant criteria for the Challenge, then your proposal may be transferred to be funded under the relevant Challenge.”
“If your application at the full application stage is assessed to be outside the scope of the Accelerator Challenges to which is it is submitted, then it will be transferred to the Accelerator Open.”
“Should the jury find the level of risk to be lower than initially identified by the applicant, the jury may also recommend another combination of components, including substitution of the grant component by a reimbursable advance.”
The ability to convert funding requests is likely one of the reasons why the grant-first success rates exceeded other modalities since some blended financing (grant and equity) applicants were converted into grant-first applicants without the EIC officially acknowledging it or releasing this information (read: EIC Accelerator 2022 Results).
While the EIC Jury and Step 2 evaluators can make a counter-recommendation in Step 2 and 3, respectively (i.e. convert blended financing to grant-first or change the topic), this can also be done during the due diligence phase. To understand the impact of this approach, the EIC should release the statistical data of all anonymized beneficiaries with timelines and funding amounts which aids in managing the expectations of future applicants.
“Should the outcome of the due diligence conclude that the innovation or your company is not yet mature for equity investment, the EIC Fund may recommend to the Commission that you start with the grant component first, and that the investment component will be subject to reaching defined milestones that will be included in the contract for the grant component via an amendment.”
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 10:16
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
Equity Financing under the EIC Accelerator
Equity financing is limited to a €15 million contribution by the EIC Fund but it is possible to request higher amounts in certain cases and especially those linked to the EIC Accelerator’s Strategic Challenges.
“The minimum investment component is EUR 0.5 million and the maximum is EUR 15 million. A more than EUR 15 million investment request is allowed in duly justified cases for: proposals in technologies that are strategic for the Union; where there is a global competition; and where the funding needs significantly exceed what is available in Europe.”
In the past, the EIC Fund had a variety of problems since applicants were not aware of how the equity financing would be implemented (read: An Inside Look into the EIC Fund). Successful EIC Accelerator blended finance applicants were under the assumption that the granted funding would be issued without additional conditions only to be asked to find their own lead investors. This became detrimental to some companies in this first batch because a lack of investor interest was why they applied to the EIC Accelerator in the first place and this is also what they explained in the application.
The EIC Accelerator required companies to justify why they cannot be funded elsewhere but then demanded they find funding elsewhere. Of course, the nuances are now clearer and the EIC has become more transparent which is of great benefit to applicants. The application template now clearly outlines the role the EIC aims to take and the conditions are well-described.
What is interesting is that the rule that the EIC Fund wants to invest with an external co-investor might change in the future, at least from the perspective of the applicant.
“The investment component of the EIC is designed to fill the funding gap for high risk innovations to a stage where they can be co-financed or financed under the InvestEU programme or by private investors alone. As the EIC accelerator is designed to bear the risk of potential breakthrough market creating innovations in order to attract alternate private investors in a second stage, the lack of such investors at the initial stage would not prevent the EIC investment to be agreed.”
While the definitions of the first and second stages are not clear (i.e. grant and equity, respectively), it can be interpreted as the EIC Fund investing in a company without any co-investors as a general rule. This could be in the form of a convertible note or loan as it was implemented previously or entail a direct equity investment.
Finding Co-Investors
The EIC has already outfitted their online platform with a list of investors and it is likely that the EIC wants to become a one-stop-shop for the full investment lifecycle. Especially past co-investors who have undergone due diligence alongside the EIC and European Investment Bank (EIB) can be collected and repurposed for future investments, thus generating a large network of compatible and strategic investors over time.
“You will also be offered the opportunity to share certain data and information with investors who have undergone a prior EIC due diligence process and who may wish to invest in your company or project and assist you in developing your idea into a business plan. You will also be asked to agree to share your relevant data with alternative funding bodies of your Member State or Associated Country.”
The language of developing your idea is interesting since the support of a strategic investor (i.e. those offering strategic support alongside financing) is very beneficial in early-stage projects stemming from Universities and other scientific institutions. If the EIC manages to build a network of strategic investors based on thematic areas (i.e. battery technology, ICT, medical devices, etc.) then this can greatly enhance the success of the funded projects and turn the EIC Accelerator into an actual business accelerator and not just in name.
The term idea is used very loosely by the EIC since TRL1 projects at the idea stage are not funded. It would be advisable if the EIC removes the term idea from the online platform as well since any company that is developing an idea from Step 1 into a business plan in Step 2 of the EIC Accelerator for the first time would likely not be successful.
The language should reflect that the project is far beyond the idea stage and has reached at least Technology Readiness Level (TRL) 5 or 6 and Business Readiness Level (BRL) 5 or 6.
Aligned with the approach of building an index of strategic investors, the 2023 Work Programme draft likewise outlines that the EIC will actively search for co-investors for the applicant.
“During this stage, and in particular if you have not yet secured other investors, the EIC Fund or the Agency will also look for other investors. You will be asked for your consent before other investors are contacted or engaged in negotiations.”
Loans from the EIC Fund
While the equity investments made by the EIC Fund already use in-direct modalities such as convertible notes or loans, it is still lagging behind in realising loans as a standard investment mode. Loans are expected to be released in 2022 or 2023 although these are of the same amount as the grant funding and seem to replace it with a repayable loan while their issuance is at the discretion of the jury in the Step 3 interviews of the EIC Accelerator.
“Reimbursable advances may be introduced during the course of 2022/23 in which case the terms and conditions will be made available on the EIC website. Once introduced, they would be considered by the jury in cases where the innovation cycle (market deployment) is short. The amount would be limited to a maximum of EUR 2.5 million and will reimburse up to 70% of the eligible costs of innovation activities. The reimbursable advance will have to be paid back to the EU on an agreed schedule as an interest-free loan. In case you are not able to reimburse or do not want to reimburse, the reimbursable advance will be transformed into equity. In case of bankruptcy, the reimbursable advance will be considered as a grant and hence written off.”
This approach seems to be a way of converting grant requests into loans which allows the EIC to fund more projects that they would have otherwise rejected (i.e. not innovative and DeepTech enough but a good business model or strong financial health).
It also allows the EIC to openly fund projects with lower risk profiles which is beneficial for Public Relations (PR) since these companies are more likely to be successful and funded by the EIC at no real cost.
It can also be a way to have more female CEO’s funded under the EIC which has been a priority and challenge for many years as well as allowing more funding for UK companies who are currently limited to grant-only support (read: UK Participation & Female Entrepreneur).
On the other hand, it is unfortunate that grant applicants now face the risk of receiving a loan after spending months in the application process and reaching the less than 10% of companies that make it to the Step 3 interviews. It would be reasonable if such counter offers are only formed in case the initial application has been officially rejected in Step 3 instead of the jury forcing a company to accept a loan in the interview prior to making a decision.
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 12:52
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
Technology Readiness Levels (TRL)
In the new 2023 EIC Work Programme, the Technology Readiness Levels (TRL) have been slightly simplified from the previous iteration whereas the new TRL’s are as follows (read: How the EIC Funds TRL’s):
basic principles observed
technology concept formulated
experimental proof of concept
technology validated in lab
technology validated in relevant environment
technology demonstrated in relevant environment
system prototype demonstration in operational environment
system complete and qualified
actual system proven in operational environment
Deadlines
Unfortunately, the newest deadlines or cut-offs for the 2023 EIC Accelerator have not been published with the released draft of the EIC’s Work Programme. Once they are known, they will be available here: EIC Accelerator Deadlines.
While the draft of the 2023 Work Programme is still unofficial, it contained a hint that the EIC Accelerator’s first cut-off will only focus on the EIC Accelerator Open while the Strategic Challenges do not apply to the first date.
“[Cutoff dates to be inserted] [for first cut-off, only Accelerator Open (not Accelerator challenges)]”
For the EIC Pathfinder Open, the first deadline in 2023 was given as:
“The deadline for submitting your proposal is 7 March 2023 at 17h00 Brussels local Time.”
Timelines
The timelines outlined in the 2023 Work Programme for the evaluations of EIC Accelerator proposals are 4 weeks for Step 1 and 6 weeks for Step 2 but these times can vary greatly depending on the workload encountered by the EIC.
The timing is also affected by the set dates for the Step 3 interviews whereas the EIC will be faster on occasions when the interview week is close while they can be slower if the interview week is far out.
EIC Accelerator Step 3 Interviews and Budgets
The EIC’s 2023 Work Programme defines priority orders in case of limitations in the budget or interview slots encountered by applicants. If the number of applicants or their budget requests exceeds the available resources, the applications will be prioritized by their recommendation status for the interview, the sex of the company’s CEO and the timing of the initial submission.
The priority order is:
“All companies that were invited by the jury to resubmit directly to one of the next interview sessions;
Gender balance: women-led companies (up to 40% of invited companies is reached);
Submission date and time: any remaining companies will be prioritised based on the date and time submission of their short proposal.
The remaining batch of companies to interview will be invited to a further set of interviews to be organised before the interviews of the next cut-off date.”
And this priority order also applies for the budget allocations:
“In case the amount allocated to GO applicants is above the budget available, then a number of applicants corresponding to the unavailable budget will be awarded funding using the available budget of the subsequent cut-off. Such applicants will be identified using the ordering set out above for the invitation to interviews.”
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 10:15
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.
The EIC’s 2023 Work programme
While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.
ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.
All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:
“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”
Financing Modes
The introduction of new funding modularities such as grant-first, grant-only, equity-only and blended financing has created confusion and added a variety of conditions that need to be considered (read: 2021 EIC Accelerator Work Programme). These especially relate to the Technology Readiness Levels (TRL) and timelines expected from the applicants (read: Technology Readiness Levels). The success rates have historically differed among these options based on data published by the EIC (read: 2022 Results) although these statistics are incomplete due to the ability of the Jury to change the funding request during the Step 3 interviews (read: Changing Grant Requests).
Grant-First Financing
An interesting development of the EIC Accelerator is the introduction of the grant-first application. As opposed to grant-only applications which foresee applicants to reach TRL9 at the end of the project (read: Funding TRL’s), grant-first is designed for very risky projects which need to define and reach important milestones before follow-up equity financing can be issued. The outcome of the grant-first project is expected to be TRL8 and should be accompanied by a milestone which can be assessed and allows the applicant to become eligible for equity investments by the EIC Fund.
In theory, the EIC Accelerator should only fund high-risk projects since the risk level is part of the evaluation criteria. In fact, the 2023 Work Programme writes:
“Financial support is provided through three main funding schemes: the ‘EIC Pathfinder’ for advanced research on breakthrough / game-changing technologies; ‘EIC Transition’ for transforming research results into innovation opportunities; and the ‘EIC Accelerator’ for individual companies to develop and scale up breakthrough innovations with high risk and high impact.”
This is its mission since low-risk and high-return projects are financed by private markets and banks. In reality, the Step 3 EIC Jury will often prefer lower-risk and high-impact projects of companies that are already interesting to private markets so it is common that a company financed by the EIC would have raised private capital anyways as well as cases such as a recently funded software company that has raised €30+ million in the past and then received grant-only support by the EIC in 2022.
It is difficult to imagine that such a company was unable to leverage financing below €2.5M from private markets after raising over €30M in the past.
It could be argued that grant-first support is the original vision of the EIC Accelerator since these projects are the riskiest and most groundbreaking projects that require a safety net in the form of milestones to assess the progress on-the-fly before further funding is committed.
“Grant First: Your innovation is based on a scientific discovery or novel technology and still requires significant work to validate and demonstrate in relevant environments in order to properly assess its commercial potential.”
If the commercial potential for high-risk grant-first projects is uncertain but, on the other hand, it is clear for other projects (i.e. equity-only, grant-only, blended) then the latter should be medium-risk at best by way of comparison since all projects must have functioning technologies already (i.e. TRL5/6: validated/demonstrated in the relevant environment).
Path to Equity Financing
For grant-first projects, the new 2023 EIC Work Programme now outlines how a company can access the equity component which allows it to reach TRL9. What is interesting is that no re-application via the 3-step EIC Accelerator application process using the online template is required (i.e. at least it is not explicitly mentioned). Instead, a formal assessment is performed which is followed by due diligence conducted by the European Investment Bank (EIB).
“Grant First: Grant-first companies are eligible for a follow on equity component subject to a milestone assessment attesting that the innovation activities are well under way and that the innovation has the potential for deployment or the interest shown by potential strategic/lead investor(s) in co-investing with the EIC into the company, as a sign of maturity of the innovation and of deployment perspective.
If the milestone assessment for a Grant First proposal is positive, you will be:
required to demonstrate that you have sufficient financial means (e.g. revenue flow, existing investors or shareholders) to finance or any remaining innovation activities and the deployment and scaling up of your innovation; or
invited to enter due diligence and negotiations to receive an EIC equity investment, including to complement any other third party investments if insufficient. Allocation of the equity investment is conditional to the due diligence assessment.
In your proposal for grant-first support, you will have to include a milestone at mid-term or at the latest 6 months before the end of the project, for the EIC to assess and decide whether to proceed or not with the negotiation and the award of an investment component.”
Considering this process, it is reasonable for all new applicants applying for blended finance or grant-first to directly include the respective milestones in the applications albeit this can also be done after the Step 3 interview has been passed successfully.
Limitations of Grant-First Projects
What is interesting to note is that, while equity financing can be used for all activities from TRL5 to TRL9, grant-first applicants are limited to only the grant component which technically limits the maximum budget that can be requested to reach TRL8 to €2.5M (including loans if they become available in the future).
For a blended finance project, financing TRL5 to TRL8 can be supplemented with equity investments which makes the maximum budget to reach TRL8 significantly larger. Considering that grant-first applications are only for the highest-risk projects, this means that the EIC will prioritize the allocation of its budget to medium and low-risk projects that receive blended financing without additional milestones.
A company with high-risk developments for artificial organs or new cancer treatments at TRL5 will be difficult to finance under the EIC because of the substantial funding requirements at low TRL’s, the need for long and expensive clinical trials as well as the limitation of grant-first applications to only obtain a grant to finance the activities.
Even in a less capital-intensive field, a project that requires €10M to reach TRL8 could not be funded without loans from other sources since grant-first applications have a maximum budget limit of €2.5M. There are still cases where an applicant can ask for larger funding amounts but this is only available in rare cases and is unlikely to be significantly higher.
There are mentions of loans provided by the EIC but these will only be available in the future since it is still vaguely described in the Work Programme. In fact, the rule that grant funding can only cover 70% of the costs is still in place so a grant-first applicant also needs sufficient co-financing or a loan by default.
“To provide for the co-financing of TRL5 to 8 activities, the EIC may introduce the option for grant-first applicants to request in their full proposal an investment component to co-finance the 30% of the costs for their TRL5 to 8 activities not covered by the grant component. If and when this option becomes available, the application form will be modified accordingly.”
Grant Budget Amounts
The 2023 EIC Work Programme also outlines the conditions for the request of higher grant amounts and longer durations:
“The grant component should normally be less than EUR 2.5 million but may be for a higher amount in exceptional and well justified cases. The innovation activities to be supported should normally be completed within 24 months but may be longer in well justified cases. “
This article is part of a series whereas the remaining articles can be found here, once published:
This article was last modified on Nov 5, 2022 @ 10:14
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)
1stcut-off: -
2nd cut-off: -
3rd cut-off: -
4th cut-off: October 19th 2023 (extended)
Step 3 (interview)
1stcut-off: -
2nd cut-off: -
3rd cut-off: October 2nd to 6th (extended)
4th cut-off: November 27th to December 8th
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).
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:
Professional Grant Proposal Writing for the EIC Accelerator and Horizon Europe Programs (SME Instrument)
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