Tag Archives: Software

The European Commission (EC) and European Innovation Council (EIC) provide €2.5 million in grants and €15 million in venture financing per startup or Small- and Medium-Sized Enterprise (SME).

This article discusses highlights from the 2022 impact report on the new EIC Accelerator program (grant and equity, with blended financing option).

1. The EIC Fund’s Mission

“In 2022, the EIC made a major development by establishing the EIC Fund as an investment vehicle for high risk, high-potential startups in their early stages of development.”

The EIC Fund is a great addition to the EIC’s portfolio of funding arms since it enables larger funding amounts and closer relationships with companies through ownership stakes, deep due diligence and board seats.

Unfortunately, it is currently not aligned with the needs of high-risk and early-stage startups due to many delays, a long backlog of unfunded companies spanning multiple years into the past and a distorted selection process that often abandons the idea of DeepTech (see Breaking the Rules).

2. Industries and the EIC’s Role

“Whether it’s the energy crisis, the food crisis, or the path towards economic resilience, the EIC is helping to find solutions to these deep societal challenges by identifying investment opportunities and catalysing private investments in deep tech startups that can scale in global markets.”

It is clear that many of the EIC Accelerator portfolio companies focus on very technical fields in the areas of health, energy, computing, space technology and others, often including hardware developments. This is a great accomplishment since pure software companies would be less risky and easier to scale in comparison.

Still, it remains to be seen if the EIC is crowding-in private investments or if private investors are crowding-in the EIC.

There are cases in which companies raised substantial capital before or during the EIC Accelerator approval process so it is likely that the EIC is pursuing a safe strategy of piggybacking on private markets while also following a risky approach of betting on disruptive technologies in parallel.

This is, of course, a very reasonable approach since disruptive DeepTech is too risky to be the exclusive priority of any investment vehicle, including the EIC.

While it is easier for the EIC to advertise results from EIC Pathfinder and EIC Transition due to the filing of patents and the publications of scientific papers, the EIC can only advertise results from the EIC Accelerator through valuations, scaling and revenues which are difficult to achieve (see The EIC Portfolio).

This places a major burden on the EIC since obtaining financial success cases is extremely difficult and creates distorted incentives where the evaluation prefers companies that are already successful rather than those that will (potentially) be. It also requires a near-unreasonable level of risk mitigation from companies that are expected to have signed contracts with major industry stakeholders or customers even at TRL5.

3. Stealing Thunder

“To date, the EIC has supported a portfolio of over 1 600 startups that have helped generate 12 deep tech Unicorns and 112 Centaurs here in Europe. EIC companies have attracted over EUR 10 bn of follow on investment and the valuation of the EIC portfolio of companies stands at over EUR 40 bn.”

Interestingly, the EIC lists a company called TWAICE as an example of a centaur but this is quite deceptive since, according to Crunchbase and public data, the company raised $30 million before obtaining EIC funding and no funding afterward. This would suggest that their valuation had already reached the centaur status, potentially exceeding the status of an SME, while the EIC support had little or no effect.

This casts doubt on the EIC’s unicorn or centaur claims and a thorough investigation of the EIC’s role in their growth and success is warranted.

4. Diversity

“The EIC also continues to outperform the market in supporting women-led companies and entrepreneurs from all regions of the EU – factors essential for a balanced and diverse innovation chain better addressing the needs and reflecting capabilities of our citizens.”

It is quite clear that the EU member states and associated countries are not equally represented in the portfolio of EIC-funded companies. Of course, this is not avoidable since different countries have varying startup ecosystems and low-GDP countries will generally struggle to create cutting-edge DeepTech startups.

Diversity goals, including gender targets, are generally driven by political agendas and it remains to be seen if such goals, as they are applied to technology investments, will have a positive impact on all citizens in the long term.

5. No Country for Old Companies

There is a preference for companies within a certain age range whereas the majority of funded businesses are 6-10 years old and a total of 50% of companies are below 10 years of age. This, of course, can stem from the fact that many older businesses are not incentivized to innovate while it is often startups that are in a position to disrupt industries with ground-breaking technologies.

6. Congesting Innovation

“The first EUR 260 m in investments through the EIC Fund has resulted in 92 investment agreements. 48 investments by the EIC Fund have been sufficiently mature to leverage just under EUR 500 m in co-investments by private and other funds, resulting in a leverage of 2.6 times the value of the EIC Fund equity investments. 2022 also saw the largest investment round involving the EIC Fund: a EUR 100 m fundraising round by SiPearl. 44 investment agreements signed by the EIC Fund have taken the form of convertible loans. These act as a bridge to the next fundraising round, which is expected to fall within 12-18 months of receiving EIC support.”

It is no secret that the EIC Fund has had a difficult past (see An Inside Look). Confusion and disappointment among beneficiaries as well as delays in the issuance of funds are still plaguing startups even 4 years later.

Most companies are still waiting to receive their equity investments and the EIC is still making structural changes to the fund which will likely lead to more delays – i.e. handing the EIC Fund to the European Investment Bank (EIB).

“Since September 2022 it has been fully functional and is in the process of taking investment decisions on 179 companies selected by the EIC Accelerator for equity support in 2021 and 2022.”

It is likely that the EIC Accelerator will undergo substantial changes over the coming years which will reshape the evaluation process and especially the selection procedure.

Considering the current evaluation process, the EIC is putting the cart before the horse by performing the due diligence on a company after the funding decision has already been made.

While the EIC Fund can still decide not to invest in a company, it is not how the program was intended to function.

Currently, a subjective assessment process using conflicting criteria in 3 steps screens companies while final investment decisions are made based on a 35-minute interview. Only then will months of due diligence be performed. This is, of course, highly uncommon in the investment industry.

7. Turtles Investing In Hares

“Operational Excellence: Including time from application to grant for Accelerator, 6 months for Transition, and 8 months for Pathfinder”

Days-to-Grant by Program

	2021	2020
EIC Accelerator	300	152
EIC Transition	91	–
EIC Pathfinder	167	207
Due Diligence*	>720	180-360

*Days-to-Termsheet

The statistics on the application durations are quite revealing since they suggest that the average beneficiary was rejected at least once in the process. For a company applying to the EIC Accelerator, it is possible to move from the beginning of Step 1 to the final funding decision in Step 3 within 6 months if no rejections are received. Afterward, 2+ months can be expected to access the funding.

Since the average duration given by the EIC is 300 days or 10 months (100% higher than in 2020), it seems that either the projects are rejected before obtaining funding, applicants skip deadlines due to the higher workload or the EIC caused substantial delays in the issuance of the financing.

Still, it is unclear what this timeline actually represents since it does not clarify the start and end points (i.e. Step 1, Step 2, Step 3, money in the bank).

But it is possible that the numbers reflect rejections faced by beneficiaries which highlights the inaccuracy of the evaluation process and the persistent luck factor of obtaining funding.

This article was last modified on May 1, 2023 @ 19:40

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon 2020, Horizon Europe, SME Instrument / EIC Accelerator

Steering the EIC Accelerator: Lessons Learned from the Pilot Program

May 2, 2023 stephanseglerphd

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.

Note: An explanation of the EIC Accelerator terminology can be found here: Explaining the EIC Accelerator.

1. The EIC Fund

1.1 Delays

“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

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, SME Instrument / EIC Accelerator

Who Should Not Apply To The EIC Accelerator And Why

April 24, 2023 stephanseglerphd

The EIC Accelerator grant financing (with blended equity option) by the European Innovation Council (EIC) and European Commission (EC) funds Small- and Medium-Sized Enterprises (SME) and startups with up to €2.5 million in grants and €15 million in equity financing per project (€17.5 million total).

The EIC Accelerator sets out clear guidelines for applicants whereas it advertises to fund:

“…startups and spinout companies to develop and scaleup game-changing innovations…”

While additional information is found inside the EIC Work Programme, the general criteria are quite vague and the first hurdle for any company interested in the EIC Accelerator is to find out if the program is suitable at all (see EIC Accelerator Explained).

This article touches on common reasons why companies should not pursue the EIC Accelerator program and might be better off looking for alternatives such as EIC Pathfinder or EIC Transition as well as non-EIC grants (see One-Stop Shop).

Note: A company that is not suitable for the EIC Accelerator can be highly attractive to other investors as well as have an excellent technology and business model. The EIC Accelerator would have likely avoided funding companies such as TikTok, AirBnB, Amazon or the European Deliveroo in the TRL5-6 stage.

1. Technology

1.1 A Simple Technology

The EIC Accelerator has funded apps and pure software businesses before but this does not mean that it is easy to obtain funding with such technologies.

In a recent report on the program, common industries funded under the EIC Accelerator were in the areas of energy, agriculture, health and similar technologies which illustrates the highly technical and scientific nature of the desired products and services (see EIC Report).

The EIC Accelerator (formerly SME Instrument) has clearly become more business-focused and is now more easily swayed by good financials compared to other R&D grants but it still retains its general focus on disruptive innovations.

Every project that seeks EIC Accelerator financing should perform a realistic assessment of how sophisticated its technology is prior to applying for grant funding.

1.2 Intellectual Property (IP) and Innovation

There are a variety of industries that are very saturated or where differentiation is minuscule such as logistics-support solutions, communication tools, social networks, payment infrastructures and many others. This will render the description of the innovation and the elaboration of competitive differentiators difficult.

It is often best to apply with a grant project that has clear IP and differentiators in an industry that is less saturated. Although this does not need to be the norm since energy and battery industries are highly saturated but are repeatedly funded under the EIC.

By funding multiple projects in a single industry, the EIC is funding competitors which is effectively growing the industry rather than nurturing a single industry winner.

While competition is a reality for all businesses and should not be a reason to avoid the EIC Accelerator, it should be assessed if the market is overcrowded and if the commercial differentiators have long been eroded.

Ideally, the target market should not be in the process of being disrupted by many other startups at the time of the application.

2. Company

2.1 Small Team

Startups often have a chicken-and-egg problem whereas companies with very small teams and no track record need financing to grow but need growth to attract financing. Since bootstrapping (i.e. self-financing through revenues) is not an option in typical DeepTech companies, private or public funding is often sought out to bridge the gap.

The EIC Accelerator is funding large teams with 100+ employees but also small teams with less than 4 staff members but the latter is often a tough sell.

While Step 1 and Step 2 evaluators are happy to see that a team is having a large reach through scientists, contractors or freelancers, the Step 3 jury will likely be very critical of teams where staff members only account for 1-3 members.

It would be useful if the EIC were to publish company statistics on the beneficiaries since factors such as the team size will likely greatly influence the success chances. In general, a team of 5+ staff members would be advisable although smaller teams have also been funded.

2.2 Founded Recently

The EIC Accelerator specifically mentions startups as their ideal applicants whereas the statistics of funded projects show that 41% of companies are aged 6-10 years while only 9% are aged 5 years and below.

Still, if a company has only begun product developments recently while starting from scratch but already reached a Technology Readiness Level (see TRL) high enough for the EIC Accelerator then it might not be sophisticated or unique enough to succeed in the program.

Additionally, if a company is only a few months old, it has likely not built substantial customer interest or market traction yet which will severely limit the appeal of the project to the EIC Accelerator evaluators and jury.

Of course, an exception is a spin-off company that has been created from a larger company, University or research institute and is founded with a strong technology and market track record.

2.3 Limited Funding

The EIC Accelerator funds projects starting at TRL5 but prefers TRL6 as the starting point in most cases. To reach this level, especially for DeepTech projects, it is necessary to raise substantial seed investments to support personnel and hardware costs.

If a company has not raised substantial financing yet or has only raised the starting capital during the founding process then the technology might lack the sophistication necessary to succeed in the EIC Accelerator program.

2.4 Limited Traction or Customers

The EIC Accelerator is a market-focused funding program and, even though it explicitly foresees Research & Development work, it has a strong commercial focus. This often leads to overlaps in the judgment of the evaluators where the TRL is assessed through the use of the technology by existing customers.

This can even extend to the point where the EIC jury will reject a project for having a TRL that is too low because no customer has interacted with the prototype yet even though the validation clearly places it at TRL6.

While it is not necessary to have paying customers, it is highly beneficial to have existing customer relationships, Letters of Intent (LOI) and other proof of traction to satisfy the evaluators.

2.5 Lacking Corporate Identity

It is very common for evaluators and EIC jury members to perform an internet search of the company they are assessing. This includes the reading of website materials, LinkedIn profiles and other public company data.

If a company has no website, social presence, or even a domain name for company emails then it will place a negative light on the company itself. Since creating such online representations is simple and not costly, it is recommended to prepare them thoroughly before considering an EIC Accelerator application.

If the CEO of a company communicates using GMAIL or similar services then this is generally a sign that the project is not fit for the EIC Accelerator.

Conclusion

It will not be necessary for every EIC Accelerator applicant to implement all the recommendations above but each individual factor can be expected to impact the evaluation.

In general, it is often beneficial to err on the side of a straightforward technology with strong market interest and traction rather than a sophisticated technology with weak market interest.

Interestingly, companies with a simple technology would likely be able to raise substantial financing from private markets in a more efficient and straightforward process compared to the EIC Accelerator. But since the EIC offers non-dilutive grants, it is still useful as a funding vehicle for companies in addition to dilutive private financing (i.e. Investing in Well-Funded Companies).

Although, it is not aligned with the mission of the EIC.

This article was last modified on Apr 17, 2023 @ 19:53

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, SME Instrument / EIC Accelerator

How to Prepare an EIC Accelerator Resubmission

April 13, 2023 stephanseglerphd

The EIC Accelerator funding (grant and equity, with blended financing option) by the European Commission (EC) and European Innovation Council (EIC) provides startups and Small- and Medium-Sized Enterprises (SME) with detailed feedback for every stage of the evaluation process (see What is the EIC Accelerator).

This feedback system is relatively new among funding programs since it enables applicants to understand why their project was positively assessed or what it was lacking.

Since the EIC Accelerator awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total), it is important for applicants to gain a deeper understanding of what the evaluations and the obtained scores mean to increase their chances of success.

Applicants are often less experienced in grant processes and, since the EIC Accelerator is unique in its structure, it is often useful to utilize professional writers, freelancers or consultants who have a greater depth of knowledge regarding the program (see Contact).

Evaluation Summary Report (ESR)

The ESR of the EIC Accelerator’s Step 2 generally provides applicants with detailed feedback on the evaluation in the form of 9 GO or NO GO ratings that account for 3 evaluators who address 3 distinct criteria, namely:

Excellence
1. Breakthrough and market-creating nature
2. Timing
3. Technological feasibility
4. Intellectual Property
Impact (or: Scale-up potential)
1. Scale up potential
2. Broader impact
3. Market fit and competitor analysis
4. Commercialization strategy
5. Key partners
Level of risk, implementation, and need for Union support
1. Team
2. Milestones
3. Risk level of the investment
4. Risk mitigation

Each of these criteria will display comments from the evaluators which are directly addressing the positive aspects or shortcomings of the EIC Accelerator proposal and therefore form the basis of the resubmission (see EIC Accelerator Evaluation Criteria).

The Effort of Resubmissions

In general, the higher the score of an EIC Accelerator Step 2 application is, the less effort an applicant has to put into the resubmission process whereas an 8/9 score will only require minimal improvements while a 1/9 score will require substantial changes (see EIC Accelerator Resubmissions).

Since each resubmission allows the applicants to provide an answer to the previous evaluation as well as a list of changes included in the resubmitted proposal, it is likely that the new evaluators will not carefully reread the entire application but focus mainly on the rebuttal and the sections that are new or changed.

As a result, the writer has a great deal of influence over the perception of the project through the responses and directions given to the new evaluators. Since the evaluators are not the same individuals who issued the initial rejection, there is likewise the benefit of not having to face evaluators who have already made up their minds or formed critical views of the project.

Very often, a previous criticism that has been unfair or incorrect can be easily addressed through a simple response and the fact that the new evaluators have no attachment to the old evaluation.

The Focus of Resubmissions

While each individual EIC Accelerator application is different, it is possible to draw general conclusions regarding the ESR. The Step 2 business plan is exceptionally long but it can be broken down into critical and less important sections to simplify the improvement process.

In many cases, it is possible to estimate the proposal quality and sophistication of sections based on the individual scoring for each of the three major ESR criteria.

This article will generalize proposals from different industries and of different quality levels so it should be noted that the recommendations will not be true for every application. It will also focus on the larger sections rather than listing every possible eventuality suggested by a negative ESR assessment.

1. Excellence

The excellence section focuses on the criteria of (1) Breakthrough and market-creating nature, (2) Timing, (3) Technological feasibility and (4) Intellectual Property.

Very often, a lacking excellence section reflects (i) the description of the technology, (ii) the need for the technology and (iii) how the technology is compared to existing solutions.

There are a variety of overlaps between all criteria since the market is mentioned in Excellence while it is also part of the Impact section and even the Risks through the mentioning of market risks. This, of course, makes it difficult to identify the source of the criticism but it can be helpful to imagine the highest level of the main criteria:

Is this an excellent technology?

If NO GO gradings were obtained then the evaluators had their doubts. Often, these stem from:

1.1 Features and Use Cases

This section is the purest technology section of the EIC Accelerator grant proposal since all other sections are heavily focused on the value chain, competition or development roadmaps.

While the features and use cases are likewise touching on these aspects, they are most suitable to explain why this technology is sophisticated and difficult. The EIC Accelerator is aiming to fund DeepTech projects that have a long time-to-market and require extensive capital investments before significant revenues can be generated.

While this mission is not entirely matching reality for Step 3 (see Breaking the Rules), it is still a focus of the evaluation process at least in Step 1 and Step 2. This means that the evaluators must see why the project fits this mission.

The features and use cases should be used to explain the technology from scratch and not be limited to the way it is used by customers.

For example, smartphone use cases would focus on the way users interact with the device but would not describe the Operating System (OS) development, data usage, app ecosystem, hardware specifications and other parts.

It is possible to prepare an EIC Accelerator application that perfectly answers all of the questions given in the lengthy proposal template but never really explains what the backend looks like and what is unique about the technology.

This is what the features and use cases can be perfect for.

1.2 Value Chain

The value chain is another example of a section where the excellence of a technology can be highlighted since it heavily focuses on the innovation of the product, the customer pain points and the unique value presented to the customers. While it is less suitable to elaborate on the technology back-end, it is highly suitable for the contextualization of the innovation.

This section will define why the innovation is unique, why it is delivering value to the customers and how it fits into the current economic, environmental and social environment.

If the excellence criteria was insufficient, it could likely be caused by an insufficient presentation in these sections.

1.3 Competitors

The competitor section is very comprehensive in the EIC Accelerator Step 2 proposal since it is distributed into two large sections as well as a variety of other sections that are directly connected to it.

The excellence of a technology and project is often assessed in contrast to existing technologies since it will directly impact its novelty. The iPhone 1 was groundbreaking in 2007 but it is barely usable as an alarm clock today.

If the competitor section is not sufficiently contrasting the excellence of the product and services then it can be responsible for a low grading in this aspect.

2. Impact (Scale-up Potential)

The impact section focuses on the criteria of (1) Scale-up potential, (2) Broader impact, (3) Market fit and competitor analysis, (4) Commercialisation strategy and (5) Key partners.

In short, it answers the following question:

How will this product change the market and lives of customers?

There are a variety of sections that are touched on by this criteria but the following key aspects are often lacking if a low score is obtained. Since it is impossible to generalize such vague criteria, the following list will not be true for all projects.

2.1 Traction

The greatest argument for why a product is needed by the market is a long list of customers, either prospective or paying, that have only good things to say about the technology. Commercial traction is proof that there is, in fact, a product-market fit and that the customers find the new product superior.

If a company has obtained a low impact score then customer traction is an important section to investigate since it might have been lacking. This includes Letters of Intent (LOI), existing customers, case studies, early revenues and general customer feedback or validations.

2.2. Market

Since the remote EIC Evaluators are not psychics, the market dynamics and current state have to be explained in detail to reflect why the project will have a strong impact. If the market analysis is poor or lacks quantifications as well as insights that support a large-scale customer deployment then this can cause a low score.

2.3 Technology Adoption Lifecycle (TALC)

While there are many other sections that will influence the impact criteria such as the scale-up potential or the partners, the TALC will greatly influence the perceived sophistication and strategy of the scale-up.

While commercial strategies do not receive substantial scrutiny in Step 2 due to the technology-heavy backgrounds of the EIC Accelerator’s remote evaluators, it is still important to clearly explain how the product will be commercialized.

3. Level of risk, implementation, and need for Union support

This section focuses on the criteria of (1) Team, (2) Milestones, (3) Risk level of the investment and (4) Risk mitigation.

There are clear objectives for the EIC Accelerator regarding the risk and need for support by the EIC since the program is aiming to fund projects that are otherwise not able to raise investments (see To Disrupt or Not To Disrupt).

In reality, the projects funded under the EIC are not all fulfilling this criterion since only funding high-risk projects is, well, too risky even for the EIC (see Breaking the Rules).

Still, great care should be placed into the sections relating to the need for EIC support since the evaluators will read them carefully and assess if the EIC is the only viable option to fund this project.

Other important sections that are commonly insufficient if a low score is obtained for this segment:

3.1 Workpackages

Many of the questions under this evaluation criterion are targeting the implementation of the project and aim to assess if the competencies of the team fit the ambitious goals and work plan. It is therefore essential to have clear and detailed workpackage descriptions.

Since the EIC Accelerator Step 2 proposal has gained in complexity over the years, it seems excessive to introduce many workpackages, tasks, costs, intermediary deliverables, final deliverables, mandatory milestones, custom milestones and even thoughtful descriptions for each but it will increase the chances of a good evaluation.

3.2 Risks

The EIC Accelerator is designed for high-risk and high-reward projects (see EIC Accelerator Risks). Still, this section is unique since it should not be too comprehensive and not be too lacking. It should be well balanced so that the project appears risky but very well mitigated.

There should always be extensive risk mitigation strategies for each risk and it is not advisable to include as many risks as possible.

If the criticism in the ESR notes that the project is “not risky enough” then this generally means that the financial, commercial and technological risks were not well presented.

If it is claimed that the project is “too risky” then either the mitigation strategies were lacking or the applicant was oversharing everything that could possibly go wrong and edged on pessimism.

3.3 Team

Of course, the team section is a highly important part of the evaluation since it is presenting the members that will implement the action. It is always critical to present a large team with all required competencies as well as to identify how missing competencies will be filled through hiring.

Since the EIC Accelerator application requires each team member to be added individually through an interactive form field, it might seem tedious to add dozens of team members but it is still recommended to present them in full except for larger companies.

Conclusion

The tips presented in this article are simple suggestions as to how certain sections can impact the scores of the EIC Accelerator grant proposal but they will not be true for every project. A successful EIC Accelerator application will depend on a variety of factors that are often unique to a particular project.

Standardizing the structure of an EIC Accelerator proposal is possible to some degree but it is often the customization and creative writing that will present a grant proposal in the best possible light.

This article was last modified on Apr 6, 2023 @ 19:24

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, SME Instrument / EIC Accelerator

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

February 10, 2023 stephanseglerphd

The EIC Accelerator grant financing (with blended equity option) by the European Innovation Council (EIC) and European Commission (EC) is interesting to many Small- and Medium-Sized Enterprises (SME) and startups but it demands extensive preparation and work.

While it provides €2.5 million in grant and €15 million in venture financing per project, applicants often rely on freelancers, professional writers or consultants to support them throughout the process since it takes many months to prepare all of the content that is needed for a high-quality submission.

An important part of the EIC Accelerator annexes is the Freedom To Operate (FTO) analysis. This article aims to provide a simplified guide on how to prepare an FTO in-house for companies that cannot afford to contract a patent law firm or lack the time.

The Importance of a Freedom To Operate (FTO) Analysis

An FTO analysis is a mandatory part of EIC Accelerator grant proposals and must be attached as a complete PDF. It is likewise referenced in multiple sections of the application which further increases its importance and renders it a highly relevant part of the EIC Accelerator application.

Often, FTO analyses are expensive since they are conducted by experienced patent law firms. This can present a challenge for startups that are in the early stages and pre-revenue as well as pre-product launch.

It can also present an unnecessary expense for certain software products since such technologies are generally more difficult to patent in Europe.

Still, an FTO analysis is very important for any IP-heavy business and, once a company has reached Technology Readiness Level (TRL) 5, it should have already analyzed the current IP landscape for the purpose of patenting its technology and preparing for commercialization.

What is an FTO analysis?

An FTO analysis is a way of assessing the existing Intellectual Property (IP) landscape to confirm that (1) a company is able to patent its technology and (2) it is able to commercialize its product without infringing on third-party patents. It is a core document that any DeepTech startup should be aware of since it can present a major risk if it is neglected.

A startup might think that they have unique IP but, if they have never analyzed what has already been patented, they might be wrong and might not be able to patent any of their past research and development efforts.

In general, an FTO analysis will be based on databases such as Espacenet to identify the available patents in certain technology segments which can be filtered through targeted keywords. It will then identify third-party patents that could potentially present an IP barrier and discuss them in detail to investigate how the existing patents impact the IP strategy of the company.

What if you do not have an FTO analysis?

Not having an FTO analysis when applying to Step 2 of the EIC Accelerator is a problem since it is a mandatory attachment to the proposal. In general, there are two options:

Contact a patent law firm and request an FTO analysis
Prepare a general FTO analysis in-house

The first option is always the safest approach since experts are experienced in this space and can add a level of assurance to the result of the analysis. Unfortunately, it is also relatively expensive and some companies would prefer to contract the preparation of an FTO analysis after the EIC Accelerator project funding is secured rather than taking the risk of not obtaining funding and paying for an expensive analysis beforehand.

This article will further elaborate on a simplified approach for the second option but it should be noted that contracting a patent law firm is recommended and the best path forward. This article is only designed to provide guidance regarding a surface-level FTO analysis for grant applications and should not be used by any company as the only assessment of third-party IP or patentability. For a thorough analysis, it is highly recommended to contract an IP law firm.

How do I prepare an FTO analysis?

An FTO analysis should look professional and have a thorough discussion of third-party patents that are relevant to the company’s IP. It should then conclude that the IP strategy of the applicant is valid and feasible.

To achieve this, it should have the following segments:

1. Company identity

Even though the FTO has not been prepared by a patent law firm, it should still have a professional look by featuring the company logo, address and whatever design is reflective of the corporate identity.

The EIC Accelerator’s remote evaluators will assess if this FTO is comprehensive and professional while a clean look and design can significantly improve that assessment.

2. Statement and Disclaimer

The FTO should begin with a paragraph that explains the nature of this document, what it contains and how it was prepared. It should act as an introduction and it should be clear that you have prepared this FTO analysis in-house and are planning to contract an IP firm for an additional FTO analysis during the EIC Accelerator project. This can also be part of the Work Packages where a service for the FTO analysis can be listed as a cost item.

The statement should likewise summarise the findings of the FTO analysis which should conclude that relevant third-party patents have been identified and discussed but no IP or commercial barriers were encountered. If barriers were encountered, the strategy to mitigate them should be explained.

The evaluators will understand that a lack of financing can be a factor in contracting an IP law firm so explaining that the FTO analysis will be repeated should be sufficient in most cases.

A table of contents should follow the statement to simplify the navigation within the document.

3. Methodology

In this section, it should be explained how the FTO analysis was prepared and what methods were used. In general, it is sufficient to explain that a database such as Espacenet was used for a global patent analysis and that specific keywords were chosen based on technology descriptions.

It is important to note that no FTO analysis is perfect since the number of patents keeps growing every day and the chosen keywords might not fully cover the entirety of the IP landscape. The quality of the FTO analysis will depend on the comprehensiveness of the keywords used and the amount of time spent researching lists and individual patents.

4. Keywords

A very simple approach to an FTO analysis is to identify innovation keyword groups based on the innovative features of the technology (see USP Development).

List the innovations of your technology and then attach multiple keywords to each list item. As an example, one could group the following keywords:

(a) Innovation: Green hydrogen generation from algae

Keywords for (a):

Green hydrogen (12,234 results)
Hydrogen algae (1,264 results)
Hydrogen biomass (9,234 results)
Hydrogen natural (13,120 results)
…

(b) Innovation: Autonomous drone

Keywords for (b):

Autonomous drone (1,876 results)
Artificial intelligence drone (879 results)
Autonomous aviation (2,456 results)
Autonomous flight (3,120 results)
…

The lists above present general examples but it is evident that the complexity of an FTO analysis will increase exponentially based on the comprehensiveness of the methodological approach.

Assuming that a company has selected 1-5 innovative components of their technology (incl. future developments), it is then recommended to list multiple keyword groups for each component and subsequently prepare multiple individual searches for each group.

Patent databases will often already sort keyword results based on relevance but it is recommended to investigate the relevance of patents and potentially use second- or third-level keywords to further filter the results and increase relevance. Since search platforms generally offer more filters (i.e. geography, date, filing status), it can also be advisable to use other means for further segmentation including the exclusion of certain keywords, if needed.

This process is tedious and iterative since it will be the responsibility of the analyst to assure that all relevant third-party patents are discovered.

A quick FTO analysis can be generated within just one hour but its validity and meaningfulness would be highly questionable. It is recommended to invest multiple days in the preparation of even a preliminary analysis.

If filtering methods were used or additional keywords were chosen to further segment the results, this information should be included in the Methodology section of the FTO analysis. The number of search results should also be included if additional filters were used.

5. Selection and Discussion of Third-Party Patents

Once the patent search has been completed, the analyst should have identified a number of patents that require closer scrutiny. Most platforms allow the selection and export of patents during the research process but it can be easiest to directly list the flagged patents in a spreadsheet.

The selected patents that require further discussion should be segmented according to their innovation in the same manner as the keywords for the patent search were categorized.

Each patent should be listed and the relevant metadata should be added (i.e. inventor, assignee, filing status, territories, etc.). For each respective patent, a discussion should be included explaining how the patent differs from the developed innovation and why this patent is neither an IP nor a commercial risk for the company.

The number of selected patents can vary widely based on the depth of the patent search and the number of selected innovations. Still, a comprehensive FTO analysis should at least have 15 patents to discuss if it is a complex and highly sophisticated technology.

6. Appendix

With all of the information presented above, the FTO analysis will already have a comprehensive and sophisticated look. With the statement provided on the first page, it should also be clear that the FTO analysis is preliminary and will be repeated during the EIC Accelerator project.

To further increase the value of the analysis, it is recommended to attach all IP information relevant to the company which will allow the evaluator to have all details relevant to the company’s IP in one single document.

Such attachments can include the following:

A list of all IP assets owned by the company including patents, trademarks, domain names, etc.
Technical graphics or image excerpts of discussed patents to support the discussion above
A legal analysis of certain patents, innovative features or the patentability of the company’s innovation(s)
Patent applications by the company that have been confirmed but not published yet
Scientific publications if they were relevant to the discussions above
Other relevant IP documents

This article was last modified on Feb 19, 2023 @ 23:39

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

A Winning Candidate for the EIC Accelerator

February 6, 2023 stephanseglerphd

The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) by the European Commission (EC) and European Innovation Council (EIC) funds European Small- and Medium-Sized Enterprises (SME) and startups.

The provided funding per project can reach €17.5 million in total (€2.5 million in grant and €15 million in equity) and there are a variety of freelancers, professional writers and consultants who can help assess the project’s success chances and perform the submission.

This article presents a short list of areas that can make a candidate stand out and gain a positive assessment in the EIC Accelerator evaluation.

1. Sexy Topic

The EIC is a public institution and is fully subject to political, technological and social trends. For better or for worse, it gives preferential treatment to certain industries and technologies which are en vogue or are gaining significant public approval. While some of these causes and technologies are always welcome, specific focus areas are updated annually and outlined in the current Work Programme (see 2023 Challenges).

In 2023, the EIC Accelerator Challenges are:

Novel biomarker-based assays to guide personalised cancer treatment
Aerosol and surface decontamination for pandemic management
Energy storage
New European Bauhaus and Architecture, Engineering and Construction digitalisation for decarbonisation
Emerging semiconductor or quantum technology components
Novel technologies for resilient agriculture
Customer-driven, innovative space technologies and services

But the topic selection is not limited to the EIC Accelerator Challenges outlined above since certain themes such as environmental protection, certain medical technology, artificial intelligence, energy, climate mitigation and others are evergreen and will always have a “wow-effect” on evaluators.

If the problem to be solved by the EIC Accelerator project is immediately understandable and evidently has a high impact then it will have higher chances of success compared to an obscure solution to a problem that is significant but not well understood outside of the industry.

Every evaluator will be aware of climate goals, cancer treatments, autonomous vehicles, quantum computing, green hydrogen, lithium-ion batteries and similar high-profile topics which means that they will have an easier time understanding the problem and the solution.

2. Impressive and Unique Technology

For the EIC Accelerator, there is no way around the fact that a project must have an impressive technology. No matter how interesting the problem and solution are, a simple App or an easy-to-copy hardware device bought from external manufacturers will likely have low success chances.

While there are always cases that slip through the cracks and get funded under the EIC Accelerator even though they are not an ideal fit (see Breaking the Rules), they are an exception and not the norm.

It must be clear to the evaluator that the technology is unique, hard to copy and perfectly designed to address the identified market pain point. For the EIC Accelerator, a sophisticated technology background is beneficial.

3. Easy to Understand

The EIC is using thousands of remote and anonymous evaluators who are underpaid considering the workload of the proposal assessments which limits the incentives to become an evaluator since neither prestige nor financial gain are presented as value propositions.

This creates a self-selection process for evaluators and limits the scope of who would be interested in and available for this type of work. It is not guaranteed that each complex technology and business case will have experts in the field available for an assessment. It is more likely that at least one evaluator tasked with grading an application will be uninformed or uneducated on the subject.

This leads to a double bind where an EIC Accelerator project should be complex enough to be impressive but cannot be so complex that the evaluator does not understand how it solves all of the problems outlined in the application.

This is exacerbated by the limited space found in key application sections where the 1,000 characters to quantify all Unique Selling Points (USP)’s or innovativeness might not be enough in some cases.

No matter what the project is about, it should be understandable to the layman and especially the problem and solution should be clear and easily understood.

4. Clear Commercial Strategy and Traction

Even though Step 2 of the EIC Accelerator is dubbed “The Business Plan” with a Go2Market section that is more comprehensive than most other sections, it is often the commercial strategy that is neglected by evaluators.

This can be a hint that many evaluators have a University or research background or can be based on the vague phrasing of the evaluation criteria (see Evaluation Criteria).

As a result, there is often a lack of understanding regarding the commercial plan and the nature of what is represented as commercial traction in the Step 2 evaluation. This can seem like a blessing for pre-revenue startups or companies lacking a commercial plan but it can lead to a reality check once the company is invited to the Step 3 interviews.

The Step 3 Jury members have a very strong commercial focus and will often identify within a few minutes what Step 2 remote evaluators have missed over days of looking through an application.

The commercial strategy should be clear and justified. If distributors are needed then they should be verifiably on board and their reach should be quantified. If the company wants to start marketing and sales, it should be explained why customers will buy from them, ideally through commitments and Letters of Intent (LOI).

While the Step 2 evaluators will likely miss the nuances and risks associated with market entry, the Step 3’s EIC Jury will not. It is beneficial to enter the Step 3 interview with a strong commercial plan outlined in the Step 2 proposal.

5. Great Team and Corporate Identity

Not every company has a LinkedIn profile with thousands of followers, a YouTube channel and an active Twitter account. The same is true for EIC Accelerator beneficiaries since not having a social media presence does not exclude a company from receiving funding.

Still, in the same way a person without any social media or online representation will appear odd, a company that has no website, uses Gmail accounts and has no social media accounts at all will seem dubious to investors.

This is aggravated by the fact that no due diligence is done prior to the successful passing of all three application steps of the EIC Accelerator. So, if the Step 3 Jury is suspicious of the claims of a company regarding staff size, experience, current customers and other metrics, it can impact a funding decision.

Since setting up a website and social media accounts is very easy and cheap, it is recommended to create a corporate identity across all sites including logos, a design theme for the pitch deck and private-domain email addresses for at least the CEO and the person who creates the account on the Funding & Tenders Portal and EIC Platform.

This article was last modified on Feb 19, 2023 @ 23:35

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, SME Instrument / EIC Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

February 3, 2023 stephanseglerphd

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

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

Investing in Well-Funded Projects: How the EIC is Breaking its Own Rules (EIC Accelerator)

January 30, 2023 stephanseglerphd

The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) by the European Innovation Council (EIC) and European Commission (EC) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total) to startups and Small- and Medium-Sized Enterprises (SME).

It is advertised as a risk-taking DeepTech fund that nurtures European innovation and allows companies that are early stage and too high risk for private investors to gain substantial financial investments and scale up to reach the market.

Startups often rely on consultants, professional writers or freelancers to help them assess their success chances since it is well-known that success rates for the EIC Accelerator are as low as 5% (see 2022 Results).

The EIC Accelerators Mission

The 2023 Work Programme 2023 explains the mission of the EIC Accelerator as follows (see Work Programme Analysis):

“The EIC Accelerator focuses in particular on innovations, building on scientific discovery or technological breakthroughs (‘deep tech’) and where significant funding is needed over a long timeframe before returns can be generated (‘patient capital’). Such innovations often struggle to attract financing because the risks and time period involved are too high. Funding and support from the EIC Accelerator is designed to enable such innovators to attract the full investment amounts needed for scale up in a shorter timeframe.“

This means that the EIC Accelerator, especially in the case of grant contributions, is designed to:

Fund DeepTech with high capital needs
Bridge the funding gap until revenues can be generated
Support projects that are too risky to attract private capital
Signaling to investors that a project is investable

This describes the ideal case for the EIC Accelerator since any technology that does not fit such criteria but has a groundbreaking and disruptive product would be financed through private markets. The EIC is a special vehicle to support high-risk and high-reward projects rather than to invest in “safe bets” which is not its role.

Breaking the Rules

An interesting exception to this mission has occurred in 2022 and, while this is likely not the only exception, it is an obvious one since it seems to be so far removed from the scope of the EIC that it warrants a discussion.

Note: The name of the company is omitted since this article is focusing on the EIC’s decision-making process and not on any individual beneficiary. Every company funded under the EIC Accelerator is likely well deserving and presents an impressive technology and business case irrespective of the EIC’s original mission. The exact cut-off and industry are likewise obscured.

What Is DeepTech?

The company is operating a software platform used in varying industry applications. Generally speaking, software products exhibit higher difficulty in receiving financing from the EIC Accelerator compared to hardware products due to the lower capital requirements and, generally, the higher availability of funds from private investors who expect faster Return on Investments (ROI) from software products compared to lengthy DeepTech developments.

This was likewise true for the software company in question which, by 2021, had already raised over €24 million in financing. Among EIC Accelerator beneficiaries, this is at the higher end of past funding amounts since most companies at Technology Readiness Level (TRL) 5-7 are struggling to raise substantial capital.

The company then applied to a Step 2 cut-off in 2022 of the EIC Accelerator for grant-only support. This is an interesting choice since grant-only applications are for a maximum amount of €2.5 million which is dwarfed by the already raised amount in excess of €24 million.

It could have made more logical sense from the EIC’s perspective if the company had difficulty raising a follow-up financing round and required a co-investment from the EIC Fund in the form of equity. This would have translated to blended financing or equity-only support rather than grant-only.

Furthermore, justifying the need for grant support by the EIC is not helped by the fact that the company already has substantial revenues.

A Drop In The Ocean

The EIC Accelerators’ mission is to bridge the financing gap for companies that have difficulties leveraging sufficient funding and are “stuck” in the valley of death between rounds due to lacking investor interest.

This particular software company could not be further from that mission since it had significant revenues, had raised substantial funding and does not obviously meet the general DeepTech case found in capital-intensive hardware projects.

A Role for the EIC

It could still be argued that the grant investment was essential to de-risk the project and to attract additional private financing. But, this would be questionable since the company has high staff numbers with a high burn rate that does not match the financing via grant-only support.

This new financing would be capped at €2.5 million since this is the maximum amount provided by the EIC grant and, since every company has to fill out and justify form fields regarding their difficulty in raising that financing, it should be expected that the same was true for this particular company.

The question becomes – what difference would this grant make for a company in that position? According to the EIC’s mission, it would be to help them if they “struggle to attract financing” or help to “attract full financing”.

As will be evident below, neither option is applicable.

Why Funding From Other Sources Was Not Available

Contrary to the EIC’s mission, funding was clearly available and de-risking the project with a comparatively small grant seemed unnecessary.

The application deadline for the Step 2 submissions is generally multiple weeks ahead of the Step 3 interviews which creates a waiting period between the steps. Right within that time frame, the company raised an additional €25+ million which it announced a few weeks before the Step 3 interview on its website.

This means that the company has raised at least 10-times as much funding as they would request a month later in front of the EIC Jury. It also meant that there was no role for the EIC to play since equity was not requested, funding was available and private investors were willing to invest already.

The EIC Jury was likely aware of the funding round and, even if this was not the case, the due diligence following the successful approval of the EIC Accelerators Step 3 would have identified this fact.

150+ Rejectees

This article is not designed to call out any particular company which is why the name was omitted. A company receiving the EIC Accelerator grant is always a cause for celebration and it shows that it has a timely, disruptive and excellent innovation.

What this article is about is the investigation of the EIC’s decision-making progress.

For the respective Step 2 deadline, 200+ companies were invited to the Step 3 interviews while 150+ companies ended up being rejected. All 150+ rejectees have successfully passed Step 1 and Step 2 which means that they are excellent innovation and business cases.

Some of them have likely resubmitted their applications and obtained the EIC Accelerator funding at a later date (see Resubmissions).

The question becomes: Were there no companies among the 150+ rejectees that fit the EIC’s mission more than the company discussed in this article?

Conclusion: Hypocrisy or Poor Communication?

It is important for the EIC to address cases that are outliers from the general scope of the EIC Accelerator to build trust with the ecosystem and to clearly manage the expectations of future applicants. This likewise extends to the large number of consultancies that are often the first stakeholders to interact with prospective applicants and must make accurate recommendations.

In conclusion, there are a variety of potential motives for this funding decision. The company was largely US-funded and the EIC could have tried to add financing to manufacture a closer relationship to the EU. Equity financing would be preferable but it appears that the beneficiary rejected that by applying for grant-only support.

Another likely explanation is that the Step 3 Jury selects the most investable companies irrespective of the EIC’s mission. The most investable companies are low-risk, have a good business model, have high scale-up potential, have existing revenues and have significant investor interest.

In contrast to the typical DeepTech case.

This article was last modified on Jan 23, 2023 @ 20:46

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, SME Instrument / EIC Accelerator

ChatGPT for the EIC Accelerator: Will the Real AI Please Stand Up

January 25, 2023 stephanseglerphd

The EIC Accelerator funding (grant and equity, with blended financing option) by the European Innovation Council (EIC) and European Commission (EC) has been largely reinvented in 2021. The previous application process of preparing and submitting a 30-page PDF file has been overhauled and replaced with a very comprehensive online platform that uses AI features and visualizations.

While it still funds Small- and Medium-Sized Enterprises (SME) and startups with €17.5 million in total funding per project (€2.5 million in grant and €15 million in equity), it is now compartmentalizing and standardizing the entire application process.

The EIC website prominently uses the term “EIC AI Platform” but calling it Artificial Intelligence (AI) seems like an overstatement. In reality, all texts and annexes must be prepared manually by applicants and no automation or intelligence seems relevant to the process which is why applicants often rely on consultants, professional writers or freelancers.

The AI features likely refer to back-end assessment features relevant to the evaluators but not to the applicants or visualizations of the innovativeness expressed through graphics.

This article is investigating the usability of ChatGPT for EIC Accelerator applications which could bring true AI and text generation to the application process.

ChatGPT

ChatGPT is a chat-based interface for AI-generated text developed by Open.AI and popularised in 2022. It has made waves in all industries that rely on written content creation since the chatbot is able to instantly generate complex texts based on user instructions.

Of course, grant writing is a major application area for such AI-generated texts since it is complex but follows very specific structures that could be standardized and automated. Especially the EIC Accelerator could potentially be a major target for AI automation since it has replaced a free business plan submission with specific and compartmentalized questions that are easier to generate compared to complex structures.

While it is to the detriment of the remote evaluators who have to read the AI-generated proposals, it is of interest to applicants and consultants to identify if a technology such as ChatGPT can save time and deliver high-quality output. Potentially, it could even increase the quality of the final application.

What is needed to write an EIC Accelerator proposal?

Assessment

An EIC Accelerator proposal differs greatly from a simple market analysis, a business plan or any content creation around mainstream subjects. The very first step and job of every consultant is to identify if the project can win the EIC Accelerator or not.

This requires a significant amount of due diligence to identify if there are any problems with the company or the project that could present a flaw in any of the application steps. The application process is complex and, through the 3-step approach taken by the EIC, it is necessary to consider how the evaluations will differ in each step.

In the first two steps, there is generally a focus on the technology and the attractiveness of the innovation to the EU with appealing industries winning over those that are lesser known (see Winning Candidates). The commercial strategy and traction are often poorly assessed in the first two steps but are becoming key in the Step 3 interviews.

Structuring

Once the project has been assessed, the next step is the structuring of the EIC Accelerator proposal according to the unique technical aspects and commercial plan of the applicant. This can present a challenge to many companies since the template questions are often vague, some proposal sections are interconnected and many individual sections are repetitive due to very similar template questions.

Writing

Finally, the writing and preparation of all proposal texts and annexes that are needed for the EIC Accelerator will follow which includes the development of all sections and the ongoing consistency verification between sections.

What can be automated with ChatGPT?

Selection and assessment process

As of today, the assessment process will be difficult to automate through technologies such as ChatGPT. If it was possible, there would be no need for an application process for the EIC Accelerator since the AI could simply select the winners based on unstructured documents or public website data.

While the Artificial Intelligence (AI) is designed to understand the context of what is requested, the context of companies seeking to apply for the EIC Accelerator is currently too nuanced to automate at this stage.

The EIC Accelerator is both broad and narrow in its scope (i.e. all industries can apply but not all companies) and is contradictory in many ways. It is designed for groundbreaking technologies and companies that have difficulties in raising private financing but well-financed companies can win as well (i.e. Breaking the Rules). There are likewise many cases where companies have to resubmit multiple times before they are approved for funding which questions the accuracy and consistency of the process.

The EIC claims to seek high-risk projects but often prefers to fund low-risk business cases with proven revenue generation and industry partnerships in the final selection step which uses external angel investors and venture partners as the jury.

In general, the assessment is currently too multifaceted to automate in any meaningful way. It is likewise inconsistent by design and any standardization and automation would likely raise questions regarding the validity of the selection process and mission of the EIC.

Planning and structuring

The planning and structuring of an EIC Accelerator application is a creative task and could be a promising candidate for automation. If the AI understands the task and the parameters then it can become a useful guide.

Here is an example from ChatGPT for the structure of the “Features and Use Cases” section of an EIC Accelerator application:

Input:

I want you to segment a topic into multiple sub-levels. I want you to pick 4 top-level titles and each title has 4 sub-level titles. The topic I want you to structure is a technology that allows RedOx flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualization.

Output:

Introduction to RedOx flow Batteries
- Basics of RedOx flow Technology
- Advantages of RedOx flow Batteries
- Current State of RedOx flow Battery Development
- Future Potential of RedOx flow Batteries
Tin-based Electrolytes for RedOx flow Batteries
- Chemistry of Tin Electrolytes
- Performance Characteristics of Tin Electrolytes
- Development and Production of Tin Electrolytes
- Applications of Tin Electrolytes in RedOx flow Batteries
Big Data and AI for RedOx flow Battery Management
- Role of Big Data in RedOx flow Battery Operations
- Artificial Intelligence for Predictive Maintenance
- Data Processing for Battery Health Monitoring
- Data Visualization for Battery Performance Optimization
Implementing Software Solutions for RedOx flow Batteries
- System Architecture for RedOx flow Battery Management Software
- Integration of Tin Electrolytes and Big Data/AI
- Deployment and Testing of Software Solutions
- Case Studies and Best Practices for Software Implementation

The result is surprisingly good but here is the catch: The input is already guiding the chatbot into a structure that is most useful. A 4×4 structure is always a good starting point. From there, one can include or change the structure since it is unlikely that 4×4 will be ideal for every project.

What is especially impressive is that ChatGPT autonomously introduced keywords such as “Predictive Maintenance” and “Battery Health Monitoring”. It likewise segregated the hardware and software components well which is exactly what is needed for a technology description.

Improving the Structure

What is not ideal is the general introduction to RedOx flow batteries and the redundant segments that are unnecessary for a clean technology description.

But overall, it is an excellent result based on minimal input.

With the structure above for the imaginary tin-data-RedOx flow battery technology, the following adaptations would be necessary for the EIC Accelerator:

RedOx flow Battery Hardware
- RedOx flow Stack and Module Design
- RedOx flow Battery Manufacturing Process
- RedOx flow Battery Operation
Tin-based Electrolytes for RedOx flow Batteries
- Proprietary Tin Electrolytes
- Synthesis and Manufacturing Process of Tin Electrolytes
- Safety and Environmental Impact of Tin Electrolytes
Big Data and AI for RedOx flow Battery Management
- Big Data in RedOx flow Battery Operations
- Artificial Intelligence for Efficiency Optimization and Predictive Maintenance
- Data Processing for Battery Health Monitoring
- Data Visualization for Battery Performance Insights

While it is impressive that AI was associated with predictive maintenance, this was not the intended primary use. Efficiency optimization and data processing were closer to the intended use case while the same is true for other associated features.

The last section regarding the implementation was likewise impressive but it did not lend itself to a good technology description since any further explanations would already be part of previous sections.

Nonetheless, with a small amount of editing, the initial 16 segments were reduced to a useful structure containing 10 segments.

One can then add another top-level topic to include other omitted parts of the process (i.e. emissions, transport, logistics, installation).

Usefulness of ChatGPT for Structuring

This approach can be useful for inexperienced writers who need support for the structuring of the application. The downside is that it requires a detailed input that already tells the chatbot what the output is supposed to look like while it also requires extensive editing of the output.

This defeats the purpose of using a chatbot but it can still be useful to ask ChatGPT to generate ideas related to a certain topic or get multiple variations of structures. The same approach can be used for competitor sections, commercial strategies, value propositions and even work packages since these will also rely on top-level structures.

But with all of the information provided above, there is still one major flaw: These text generations only relate to the structure of an application but do not help in generating the bulk of the proposal text.

Writing the Proposal

Now, we will test ChatGPT with the same level of information but will ask it to answer a key question found in the EIC Accelerator Step 2 grant proposal template. We will choose the question “What is your unique selling point?” which is quite simple:

Input:

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “What is your unique selling point?“. The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialized electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualization.

Output:

Our technology allows redox flow batteries to operate more efficiently through the use of specialized electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualization. This results in improved performance and longevity of the batteries, as well as better management and prediction of their performance. This can lead to cost savings and increased reliability for businesses and organizations that use redox flow batteries. In addition, our technology can also open up new applications for redox flow batteries that were previously infeasible.

It managed to generate 610 characters which is quite impressive since the input was minimal. Unfortunately, the text is vague and has followed the input very closely with little to no creative elaborations that would be relevant for an EIC Accelerator application.

Improving the Output

Now, we will improve the output to be more aligned with the EIC Accelerator by introducing instructions on how USP’s should be presented.

Input:

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “What is your unique selling point?“. I want the answer to contain a list with the 3 most important selling points and you should add placeholders for numbers to be added regarding the cost savings, efficiency increases and total energy capacity. The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialized electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualization.

Output:

Our technology allows redox flow batteries to operate more efficiently through the use of specialized electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualization. This results in improved performance and longevity of the batteries, as well as better management and prediction of their performance. Our top 3 selling points are: 1) cost savings of up to [number]%, 2) efficiency increases of up to [number]%, and 3) total energy capacity increases of up to [number]%. These benefits make our technology an attractive solution for businesses and organizations that use redox flow batteries, and can also open up new applications for these batteries.

This is already better since we now have a list of selling points and can add quantifiers that were omitted from the first version. We also exceed 700 characters on this answer which shows that there are ways of increasing the output with additional input.

Again, the problem for inexperienced writers is that the input is already leading the chatbot in the right direction. It is not obvious to ChatGPT that a list of selling points and qualifications are needed to answer this question but it is obvious to professional writers and consultants who work with EIC Accelerator grants.

Improving the Input

Now, the second problem that we encounter is quite obvious: Our input is almost as long as the output. This is obviously a problem since we are here to save time and not to teach ChatGPT how to write.

Still, one can prepare a general text that describes the technology, commercial strategy, team, market and other aspects which can then be copy-pasted while asking ChatGPT to convert the text into an answer to a specific question. For example:

Input

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “What are your strengths?“.
The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualisation.
The main customers are 3 groups, namely wind-farm owners, hotels and charging stations for electric vehicles.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We have 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. We also have 3 additional patents in development.
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Please add placeholders for our pricing so we can add numbers later.
I want you to include placeholders for quantification such as cost savings, efficiency increases and total energy capacity.

Output

Our technology allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualization. Our technology is particularly well-suited for wind-farm owners, hotels, and charging stations for electric vehicles. Our main strength is our ability to provide significant cost savings, efficiency increases, and total energy capacity increases for our customers. We achieve this through our 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. Additionally, we have 3 additional patents in development.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Our pricing models include a [placeholder for pricing of the redox flow battery hardware], [placeholder for pricing of the electrolyte], [placeholder for pricing of the maintenance costs], and [placeholder for pricing of the data and software access].
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.

The ChatGPT output is generally ignoring the character restriction given in the first part of the input. It likewise always tries to enter all information that was given instead of only choosing what is relevant to meet the character limit. It does account for the question regarding the “strengths” but it does not lead with the answer and always tries to summarise the input rather than to answer the question.

Input

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “Is your technology creating a new value chain?“.
The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualisation.
The main customers are 3 groups, namely wind-farm owners, hotels and charging stations for electric vehicles.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We have 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. We also have 3 additional patents in development.
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Please add placeholders for our pricing so we can add numbers later.
I want you to include placeholders for quantification such as cost savings, efficiency increases and total energy capacity.

Output

Our technology allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualization. Our technology is particularly well-suited for wind-farm owners, hotels, and charging stations for electric vehicles. Our technology is creating a new value chain for the energy storage industry by providing significant cost savings, efficiency increases, and total energy capacity increases for our customers. We achieve this through our 3 patents for the electrolyte, the redox flow stack design, and for the software mechanisms and control system. Additionally, we have 3 additional patents in development.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Our pricing models include a [placeholder for pricing of the redox flow battery hardware], [placeholder for pricing of the electrolyte], [placeholder for pricing of the maintenance costs], and [placeholder for pricing of the data and software access].
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
Our technology creates a new value chain by providing customers with cost savings, efficiency increases and total energy capacity increases, by working with battery system manufacturers and by generating revenues through selling of hardware, electrolyte, maintenance costs and data and software access.

The text is clearly very repetitive. This is not ideal if our goal is to generate most of the input with only minor adjustments. Of course, one can try to force ChatGPT to be more precise and ask it to only use the input that is useful to answer the question but this would likely increase the input and customization even further.

Input

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “What is your innovation?“.
The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualisation.
The main customers are 3 groups, namely wind-farm owners, hotels and charging stations for electric vehicles.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We have 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. We also have 3 additional patents in development.
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Please add placeholders for our pricing so we can add numbers later.
I want you to include placeholders for quantification such as cost savings, efficiency increases and total energy capacity.

Output

Our innovation is a technology that allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualisation. Our technology is particularly well-suited for wind-farm owners, hotels, and charging stations for electric vehicles. Our innovation is creating significant cost savings, efficiency increases, and total energy capacity increases. We achieve this through our 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. Additionally, we have 3 additional patents in development.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Our pricing models include a [placeholder for pricing of the redox flow battery hardware], [placeholder for pricing of the electrolyte], [placeholder for pricing of the maintenance costs], and [placeholder for pricing of the data and software access].
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
Our innovation allows redox flow batteries to operate more efficiently, providing significant cost savings, efficiency increases, and total energy capacity increases through the use of specialised electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualisation.

This time, ChatGPT led with the requested answer albeit the text is still far too long and repetitive.

Input

I need you to write me a text with a length that is as close to 1000 characters as possible. The content is supposed to answer the following question “What is your unique positioning or place on the market?“.
The topic I want you to write about is a technology that allows redox flow batteries to operate more efficiently through the use of specialised electrolytes based on tin molecules and software that uses components including big data, artificial intelligence, data processing and data visualisation.
The main customers are 3 groups, namely wind-farm owners, hotels and charging stations for electric vehicles.
Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We have 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. We also have 3 additional patents in development.
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Please add placeholders for our pricing so we can add numbers later.
I want you to include placeholders for quantification such as cost savings, efficiency increases and total energy capacity.

Output

Our unique positioning in the market is that we provide a technology that allows redox flow batteries to operate more efficiently through the use of specialized electrolytes based on tin molecules and software that uses big data, artificial intelligence, data processing and data visualization. Our technology is particularly well-suited for wind-farm owners, hotels, and charging stations for electric vehicles. We provide significant cost savings, efficiency increases, and total energy capacity increases for our customers. Our commercial strategy is to work with battery system manufacturers who will distribute our products to our customers since they still include power electronics such as inverters and casings.
We generate revenues through the selling of the redox flow battery hardware, the electrolyte, the maintenance costs and through data and software access. Our pricing models include a [placeholder for pricing of the redox flow battery hardware], [placeholder for pricing of the electrolyte], [placeholder for pricing of the maintenance costs], and [placeholder for pricing of the data and software access].
We have 3 patents for the electrolyte, the redox flow stack design and for the software mechanisms and control system. We also have 3 additional patents in development.
We need to finish our developments by completing the electrolyte manufacturing process and by improving the AI systems as well as analytics platform.
Our unique positioning in the market is that we provide a technology that allows redox flow batteries to operate more efficiently with significant cost savings, efficiency increases, and total energy capacity increases and working with battery system manufacturers to distribute our products.

The general problem is that the chatbot is not trying to create an answer to the question primarily but is aiming to always summarise the input in its entirety while ignoring character limits. But this effect could be remedied with better input instructions.

Still, ChatGPT does not understand that the “position in the market” must be contrasted with current market dynamics.

Unfortunately, it seems like each input will require substantial customization and generating 100+ unique inputs for the EIC Accelerator proposal with extensive post-editing is unfeasible.

Annexes

For ChatGPT, is it impossible to present a useful Freedom To Operate (FTO) analysis from scratch since it is based on dated data sets among other limitations and it is likewise infeasible to generate financials and documents such as Letters of Intent (LOI).

Although, it can aid in creating templates for the Data Management Plan (DMP) or LOI’s:

Input:

I want you to create a template text for a customer (use a placeholder) who sends me a letter of intent to purchase my redox flow battery. Please include benefits such as the lower cost, higher efficiency and increased energy capacity. I need four different versions of the letter.

Output 1

Dear [Placeholder for Customer Name],

We are writing to express our interest in purchasing your innovative redox flow battery technology. Our company [Placeholder for company name] is actively seeking new solutions to improve the efficiency and cost-effectiveness of our energy storage systems. We have been impressed by the benefits of your technology, such as the lower cost, higher efficiency and increased energy capacity, and we believe it would be a valuable asset to our operations.

We would like to move forward with the purchase of your redox flow battery technology and request more information on the details of the product and the purchasing process. We look forward to the opportunity to work with you and to the potential benefits that this technology will bring to our company.

Please let us know your next steps, and we are happy to start the purchase process.

Sincerely,
[Placeholder for Customer Name]

Output 2

Dear [Placeholder for Customer Name],

We are writing to express our interest in your redox flow battery technology. Our company [Placeholder for company name] specializes in [placeholder for company’s specialization] and we are always looking for new ways to improve our operations. We have been impressed by the benefits of your technology, such as the lower cost, higher efficiency and increased energy capacity, and we believe it would be a valuable asset to our company.

We would like to move forward with the purchase of your redox flow battery technology, and we would appreciate if you could provide us with more information about the product and the purchasing process. We look forward to the opportunity to work with you, and to the potential benefits that this technology will bring to our company.

Please let us know your next steps, and we are ready to start the purchase process.

Sincerely,
[Placeholder for Customer Name]

Output 3

Dear [Placeholder for Customer Name],

We are writing to express our interest in your innovative redox flow battery technology. Our company [Placeholder for company name] operates [placeholder for company’s operations] and we are always looking for new ways to improve our efficiency and cost-effectiveness. We have been impressed by the benefits of your technology, such as the lower cost, higher efficiency and increased energy capacity, and we believe it would be a valuable asset to our operations.

We would like to move forward with the purchase of your redox flow battery technology and we would appreciate if you could provide us with more information about the product and the purchasing process. We look forward to the opportunity to work with you, and to the potential benefits that this technology will bring to our company.

Please let us know your next steps, and we are ready to start the purchase process.

Sincerely,
[Placeholder for Customer Name]

Output 4

Dear [Placeholder for Customer Name],

We are writing to express our interest in your redox flow battery technology. Our company [Placeholder for company name] is a leader in [placeholder for company’s specialization] and we are always looking for new ways to improve our operations. We have been impressed by the benefits of your technology, such as the lower cost, higher efficiency and increased energy capacity, and we believe it would be a valuable asset to our company.

Please let us know your next steps, and we are ready to start the purchase process.

Sincerely,
[Placeholder for Customer Name]

Unfortunately, the templates are quite repetitive even though it is quite easy to be more creative with the provided input. With different input instructions, it is likely possible to gain more versatile letter templates but this article is investigating if satisfactory results can be generated with minimal work effort.

Conclusion: Is ChatGPT useful for the EIC Accelerator?

Yes. ChatGPT has great potential for structuring and brainstorming applications, especially for new writers. What would be necessary to increase the usability of chatbots is a version of ChatGPT that is familiar with successful grant proposals for the EIC Accelerator so that it understands what types of answers do well in certain sections.

The problem with that approach is that ChatGPT is making editorial decisions such as including “predictive maintenance” or trying to add the development plan to the question about the company’s strengths.

Unfortunately, ChatGPT is not a time saver at this stage. There can also be serious concerns regarding plagiarism since, while the text is AI generated, it is based on data sets that can be from proprietary sources. This is a risk carried by anyone who uses ChatGPT for professional use.

But ChatGPT can be a useful tool if used appropriately.

This article was last modified on Jan 21, 2023 @ 15:24

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)

EIC Accelerator, Horizon Europe, Phase 2, SME Instrument / EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

January 21, 2023 stephanseglerphd

The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) by the European Commission (EC) and European Innovation Council (EIC) is a complex funding instrument for startups and Small- and Medium-Sized Enterprises (SME).

It is often supported by professional writers, freelancers or consultants since it can be challenging for startups to navigate the lengthy assessment and proposal writing process. This article aims to provide a brief but comprehensive overview of the program to help future applicants decide if the EIC Accelerator is the right instrument for them.

What is the EIC Accelerator?

The EIC Accelerator is a funding program by the European Commission (EC) and the European Innovation Council (EIC) as part of Horizon Europe.

It funds innovative DeepTech companies with grant and/or equity financing of up to €2.5 million and €15 million, respectively (see 2023 Budget).

Applicants can be from the EU-27 countries or from countries associated with Horizon Europe (see Eligibility).

The company’s technology should have reached Technology Readiness Level (TRL) of 5 at least and be able to reach TRL8 within 24 months but exceptions can apply (see Technology Readiness Levels).

What does the EIC Accelerator provide?

Next to business acceleration, coaching and networking opportunities, it provides funding in the form of 4 different application options:

Grant-only: A non-dilutive grant with the company reaching TRL8 at the end of the project and subsequently reaching TRL9 without the help of the EIC.
Grant-first: A non-dilutive grant with the company reaching TRL8 at the end of the project. There is an option to apply for dilutive equity financing from the EIC Fund afterward to reach TRL9 (see Grant-First).
Equity-only: Dilutive equity funding from the EIC Fund to reach TRL9.
Blended finance: A mix of non-dilutive grant and dilutive equity financing to reach TRL9 at the end of the project.

How do the different funding options finance development work?

In general, grant funding can only be used for activities up to TRL8 (i.e. TRL5 to TRL8) while equity funding can be used for developments up to TRL9 including innovation activities (i.e. TRL5 to TRL9).

What industries can apply and are there topic limitations?

The EIC publishes topics every year in the EIC Work Programme which outlines specific budget allocations. Generally, the budget is split between the options of an “Open” and a “Challenge” Call which are usually available on the same cut-off dates (see Deadline). A company can therefore decide which topic they would like to apply for. The two options are:

EIC Accelerator Open: This call is open to applicants of all industries provided they are not violating the agendas of the European Union (EU) in terms of climate, human rights, ethics and other political and social targets.
EIC Accelerator Challenges: These topics are clearly defined technology and industry themes that must be achieved or covered by the applicant (see EIC Accelerator Challenges). The applicant can select the respective Challenge during the Step 2 submission process.

When and how can I apply?

The EIC Accelerator generally has 3-4 cut-offs per year which are set for Step 2 submissions (see Deadline). The following conditions apply:

Step 1: This step encompasses a short application including a pitch deck (see Pitch Deck), a video (see Pitch Video) and a short proposal. Submitting a proposal is possible at all times since the call is continuously open.
Step 2: This step requires a very detailed business plan in addition to multiple annexes such as financials, Letters of Intent (LOI), a Freedom to Operate (FTO) analysis, a Data Management Plan (DMP), a pitch deck and a customizable company profile. After Step 1 has been passed, the applicants can apply to Step 2 to any of the designated deadlines (see Deadlines).
Step 3: This step is an interview with the EIC Jury that is usually conducted online through a video call. It encompasses a 10-minute pitch by the applicant using the pitch deck submitted in Step 2 and an up to 35-minute Question and Answer session by the jury (see Interview Preparation). If Step 2 has been passed successfully, the interview dates are generally a few weeks after the Step 2 evaluation was completed.

The EU application process is performed on a dedicated website provided by the EIC where an online form is acting as the proposal template. Each applicant can create the appropriate proposals and begin writing applications inside the web browser although it is recommended to use off-platform templates to prepare all documents in collaboration with a team and then upload the content for the submission.

What does the result of an application look like?

The EIC has increased the level of transparency compared to earlier years and has introduced detailed feedback from evaluators. For Step 1 and Step 2, four or three evaluators will grade the application, respectively, and leave feedback for the applicants.

Each evaluator will be able to grade the proposal with a GO or NO GO rating.
For Step 1, at least 2/4 of evaluators have to provide a GO for the application to be successful.
For Step 2, at least 3/3 of evaluators have to provide a GO for the application to be successful.

Feedback is provided to the applicants irrespective of the GO or NO GO grading through detailed responses by the evaluators for all evaluation criteria (see Evaluation Criteria).

For the Step 3 interviews, a unanimous decision by the EIC Jury is presented and the applicants likewise receive responses regarding the evaluation criteria as well as the GO or NO GO result.

If the applicant passes all three steps, the preparation for the Grant Agreement Contract (GAC) and a due diligence process are initiated.

How long does it take to apply for the EIC Accelerator?

The time it takes to apply for the EIC Accelerator will differ depending on the number of resubmissions and the efficiency of preparing an application. It can be further delayed if the due diligence process is slowed down from the side of the EIC.

In general, one can expect a timeline of 2-4 weeks for the preparation of Step 1 followed by a 5-30 day average assessment period. For Step 2, a 50-70 day preparation period followed by a 30-40 day assessment period should be expected. With the Step 3 interviews following approximately 2-6 weeks after the Step 2 result is obtained, one can add an additional 3-5 weeks to receive the final grading by the EIC Jury.

A fast application process can go from the Step 1 start to Step 3 approval within 6 months if no rejections have occurred and if all documents were prepared efficiently without waiting times.

In case of rejections and multiple resubmissions, the total process can also take multiple years and there is never a guarantee that a project will be funded.

What are the success chances for the EIC Accelerator?

Since the 3-Step application process is complex, it is difficult to estimate exact numbers for success rates. If 1,000 companies apply for Step 1 and 70% receive a GO over multiple weeks then it cannot be determined based on the published data how many of these exact companies proceed to the subsequent Step 2 deadline (see Deadlines).

The metrics are further obscured through the previous batch being able to resubmit their applications or abandon the application entirely.

Based on past data, the following estimations can be made (see 2021, 2022A, 2022B):

Step 1: ~67% pass rate
Step 2: ~22% pass rate
Step 3: ~32.5% pass rate
Total EIC Accelerator success rate: 4.8%

What limitations exist regarding the submissions?

The EIC Accelerator has introduced freezing periods for resubmissions whereas every applicant generally receives two attempts for each written proposal step (i.e. “two strikes, you’re out”). This means that a company that has failed twice in Step 1 will be blocked from submitting the same application for 12 months. The same is true for Step 2 applications.

There are nuances in the case of the Step 3 interviews which are explained here: Resubmission Process Explained.

What types of companies actually win the EIC Accelerator grant?

The companies that generally win the EIC Accelerator are often DeepTech hardware businesses but there are likewise software and IT industry winners among the funded projects (complete beneficiary lists are linked here: 2021, 2022A, 2022B).

How do I know if I should apply or not?

Predicting who will receive funding under the EIC is difficult even for seasoned consultancies. While it is possible to estimate the chances, the level of randomness during the evaluation process and the unknown variables introduced by the company during the proposal writing process render any estimate to be speculative.

If the company has an excellent technology, a great team, a scalable business model and is aligned with EU interests then the EIC Accelerator is worth pursuing.

Here is a list of general considerations for an ideal project: A Winning EIC Accelerator Candidate

This article was last modified on Feb 19, 2023 @ 23:35

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)
- 1^st cut-off: -
- 2^nd cut-off: -
- 3^rd cut-off: June 7^th 2023
- 4^th cut-off: October 4^th 2023
Step 3 (interview)
- 1^st cut-off: -
- 2^nd cut-off: May 22^nd to June 2^nd
- 3^rd cut-off: September 11^th to 22^nd
- 4^th cut-off: November 27^th to December 8^th

Contact: You can reach out to us via this contact form to work with a professional consultant.

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:

A Quick FTO Guide for EIC Accelerator Applicants in a Rush

2023 Budget Allocations for EIC Pathfinder, Transition and Accelerator

Developing the Unique Selling Points (USP) for the EIC Accelerator

Explaining the Resubmission Process for the EIC Accelerator

A Short but Comprehensive Explanation of the EIC Accelerator

EIC Accelerator Success Cases

Deciding Between EIC Pathfinder, Transition and Accelerator

A Winning Candidate for the EIC Accelerator

EIC Accelerator Interview Preparation Process: Scripting the Pitch (Part 1)