One could argue that the Question & Answers (Q&A) session that is part of the EIC Accelerator interviews requires a significant amount of the overall preparation time. With a length of up to 35 minutes after the 10-minute pitch by the startup or Small- and Medium-Sized Enterprises (SME), it can make or break a fund-raising application.
In this third part of the EIC Accelerator interview guide, the focus will be on the Q&A. This article aims to provide suggestions as to how a company can prepare and be in the ideal position to succeed during the EIC’s pitch week.
Since most companies are used to having long-lasting investor conversations prior to facing a final investment decision, even experienced management teams often have to adjust and practise for this particular, fast-paced interview session.
- Be aware of EIC rules and agendas (i.e. what the jury is looking for)
- Do not give the jury a reason to reject you (i.e. no red flags)
- Do not get cornered on a topic that is of no benefit (i.e. no wasted time)
Note: This article focuses on strategies for practising Q&A sessions while the next articles will focus on how answers can be improved and developed.
How To Practise (The Mock-Jury)
When practising for the pitch interview, it is often difficult to simulate a stressful environment or have supporters who can project the demeanour that is needed for such a practice. But this is an essential part since:
We don’t rise to the level of our expectations, we fall to the level of our training.
If a startup is working with a consultancy or professional writing team then they can take this role but, as a precaution, every applicant team should also make an effort to create such sessions internally. Since nobody wants to alienate their co-workers or partners with a stressful questioning session, a simple way of creating pressure is to add interruptions.
As an example: When the mock jury member asks a particular question on a certain aspect of the project which the interviewee then responds to, the questioner proceeds to cut off the answer with a follow-up question within 10-20 seconds, at a point where it is confusing, too slow or irrelevant. By using this approach, one can simulate being caught off-guard since the follow-up questions will inevitably force the interviewee to make their answers more succinct. It will likewise allow the questioner to quickly screen for weaknesses in the responses and, through multiple follow-ups, find additional areas that must be prepared in detail prior to the pitch.
Example (Interviewee / Mock-Jury)
- What is your business model?
- We have a SaaS business. We sell access to our software mainly to Universities and research institutes so–
- How do universities pay you? Have you demonstrated willingness-to-pay or do you face long tendering processes?
- Well, we do not have revenues yet but we have pilot tests with some institutes and they have told us that they would pay for this. We also have–
- So this is unproven. Have you demonstrated willingness-to-pay in any core customer segment?
During the entire Q&A practice, it is beneficial to make interruptions a habit since these will help everyone involved to self-correct their answers and polish them in their minds before they answer. The worst practice environment for a Q&A is one where the team has unlimited time and is allowed to brainstorm as they answer the question or even discuss the answers with their colleagues. The idea is to generate a sharp answer and then move on to the next one. Developing better answers can be done afterwards.
For the mock-jury, the rule is to make almost no answer go uninterrupted.
The Devils Advocate
It is often very difficult to find someone who is able to ask good and tough questions. Consultants and writers will know the project very well while employees, investors and others will likely also be overfamiliar with the company. Additionally, since many DeepTech companies have to guard their Intellectual Property (IP), they often do not want to include additional parties in the process just to ask a few questions.
A solution can be to hire an external party since there are a variety of pitch coaches who specialise in this type of training and can be a suitable support option.
Playing the devil’s advocate can also be done with existing consultants or internal team members since the rule is simple:
Pretend that you do not know the answer and ask the worst possible questions.
Especially if you already know the technology in and out, you will know the business model, the customers and all of the weaknesses, risks and uncertainties. To develop good questions, one should look at the project in the most negative light possible. The idea is to take the side of the competitors or those who would criticise the project.
Example (Interviewee / Mock-Jury)
- What is your product?
- We produce and sell battery cells based on a new material.
- What’s innovative about it?
- With our approach, we can reduce the energy needed during battery production by 15% as well as the related costs. We–
- Is the new battery as long-lasting as the conventional materials?
- We do not have long-term studies yet but we expect that it will have a comparable half-life. So–
- But if it does not then wouldn’t it be a pointless product? What half-live benchmark do you have to reach to make sure that the 15% upside remains relevant for customers?
- We have not calculated that yet but do not see this as an issue.
- It sounds to me that your competition is still the better alternative until you can validate your half-life. Is that wrong?
As a mock-jury member, highlight the weaknesses of the innovation and overexaggerate the benefits of competing products. Question the existence of the innovation in the market to create a robust set of answers.
Looking for Flaws
The EIC Jury interview might be a pleasant experience but it can also turn stressful and be riddled with criticism. As an old saying goes:
Prepare for the worst. The best will take care of itself.
There might be one Jury member who is looking to criticise, who accepts no response to be good enough and who has already made the decision that they do not like the project. Unfortunately, there are many accounts of rejected applicants who found the interview to be stressful and at least one of the EIC jury members to be unpleasant.
If this happens then it is unfortunate but it is one more reason to prepare for such a case.
The principle of practising to look for flaws is simple: Try to entrap the interviewees and corner them in a place where they do not want to be. This can be because they do not know the answer, they have never thought about this or because the answer might lead to even worse questions.
Being critical does not mean that the questioner needs to be unpleasant. On the contrary, playing the role of someone who is looking for flaws can be good practice for everyone involved. If one of the interviewees just stepped into a trap and looks confused while the other two interviewee’s try to suppress their laugh then the practise session is going well.
Example (Interviewee / Mock-Jury)
- How much financing have you raised so far?
- In total, €2.5M from grants and angel investors.
- Are you in discussions with other investors now or expect other investments in the coming months?
- Yes, we are talking to Venture Capitalists regarding a bridge round at the end of the month.
- How much are they considering to invest?
- We are discussing a €1M investment but it can also be higher.
- Then is it not best if we wait until they have made the decision and you apply again to the EIC in 3 months?
Have one person (the mock-jury) ask questions and follow-ups that progressively become more difficult to try and entrap the interview candidates. These traps will be the basis for the improvement strategies for answers discussed in the following articles.
Learn the Rules & Read the Application
It can be assumed that a majority, if not most, of the applications that are selected for the Step 3 interviews of the EIC Accelerator have either been written by consultants, professional writers or with the strong support of the startup’s employees (i.e. delegation of tasks). No matter how the company reached this last stage, it is likely that the three interviewees are not entirely familiar with all the application documents.
While many might think “I know my company in and out already!”, it would be a fatal error to not be perfectly familiar with the application. With three team members being invited to the EIC’s pitch week, it is not necessary for everyone to know everything but, as a collective, all three team members should know the entire application like the back of their hand.
The CFO should know the financial spreadsheet, the cashflows given in the Technology Adoption Lifecycle (TALC), the work package budgets and all related financial aspects. The CTO should know the development tasks, should be familiar with all the features and uses cases as well as know what the exact pain points described in the application are.
The team should distribute all proposal documents to assure that at least one person knows the relevant information. In addition, all three interviewees must know the EU’s and the EC’s rules which are described in the previous article to avoid displaying red flags (i.e. non-bankability, strategic challenges, risk-level).
Example (Interviewee / Mock-Jury)
- What developments are you planning under the EIC?
- We want to optimize our production process, get certifications for the resulting hardware and develop the AI software.
- What budget are you allocating for the production process optimization?
- We expect this to cost approximately €0.8-1M.
- I have seen your Work Package 5 and it shows a very different number there. It list €450K for the production process. Why the discrepancy?
Practice asking precise questions on the proposal documents. These can include the Freedom to Operate (FTO) report, the budget, the competitors and many more sections.
Choose Who Answers What
It is critical for the team to assure that the most suitable expert will be answering the questions in their field of expertise. This can be difficult due to time constraints and it can also be hindered by the most confident member of the team taking the answering role out of pure habit (i.e. the CEO answering a financial question while the CFO remains silent). Suggestions to mitigate any problems are:
Give each person a topic
As an example, the CEO answers business model and market questions, the CTO answers technical questions and the CFO answers budget, investment and financial questions. This sounds simple but there can be significant issues that only become obvious during practice.
What if the question is financial in nature but it asks why the technical development costs are so high? This question might be too technical for the CFO. What if the commercialisation question overlaps with technical customer pain-point or the willingness-to-pay? There are many situations in which the ideal person will be ambiguous. Thus, it should be practised diligently.
Sit in the same room
It is much easier to transfer questions if the team sits right next to each other. The CEO can nod at the CFO and if one person decides to jump in then this can be well-timed as opposed to yielding awkward interruptions or confusion during a video call.
Note: This is only applicable for video calls and not for in-person pitch events in Brussels where all team members are in proximity by default.
Practise question allocations
Since questions will likely overlap greatly when it comes to the themes or topics, it is beneficial to practise this in every pitch session. What must be avoided is that the CEO or the most vocal team member ends up answering all questions. If one person has already answered questions for 15 minutes then it is likely that no other team member will dare to jump in since they are not used to it. It will be beneficial if the team members become accustomed to answering questions as a unit and have an almost immediate response without any awkward looks or confusion as to who should answer.
This practice routine illustrates how the team can integrate critical questioning into their mock sessions while it likewise hints at methods for their preparation. It is recommended to select one or more questioners who can play the devil’s advocate and aim to pressure the team through frequent interruptions.
The following articles will present strategies to develop perfect answers to questions and, most importantly, develop a framework to master unpredictable questions that would catch the team off-guard. This will help the interviewees to not end up in the critical situations given in the examples above.
- EIC Accelerator Interview Preparation Process: Scripting The Pitch (Part 1)
- EIC Accelerator Interview Preparation Process: The Importance of the Q&A (Part 2)
- EIC Accelerator Interview Preparation Process: Interviewee Considerations (Part 4)
These tips are not only useful for European startups, professional writers, consultants and Small and Medium-Sized Enterprises (SME) but are generally recommended when writing a business plan or investor documents.
Deadlines: Post-Horizon 2020, the EIC Accelerator accepts Step 1 submissions now while the deadlines for the full applications (Step 2) will be on March 16th 2022, June 1st 2022 and October 5th 2022 under Horizon Europe. The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.
Contact: You can reach out to us via this contact form to work with a professional consultant.
EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).
Any more questions? View the Frequently Asked Questions (FAQ) section.
Want to see all articles? They can be found here.
For Updates: Join this Newsletter!
by Stephan Segler, PhD
Professional Grant Consultant at Segler Consulting
General information on the EIC Accelerator template, professional grant writing and how to prepare a successful application can be found in the following articles:
- EIC Accelerator Interviews: Pitch Deck vs. Proposal Documents (SME Instrument)
- Choosing a Good Project for the EIC Accelerator (SME Instrument Phase 2)
- The EIC Accelerator Budget: Grant vs. Blended Finance (SME Instrument Phase 2)
- EIC Accelerator – Introduction and Blended Finance (SME Instrument Phase 2)
- EIC-Accelerator Writing: Providing the Missing Link (SME Instrument Phase 2)
- The Biggest Mistakes When Applying to the EIC Accelerator (SME Instrument Phase 2)
- Identifying a Broad Vision for an EIC Accelerator Project (SME Instrument Phase 2)