The Conditions for EIC Equity Investments (2023 EIC Accelerator Work Programme Part 3)

The EIC Accelerator funding (grant and equity, with blended financing option) awards up to €2.5 million in grant and €15 million in equity financing per project (€17.5 million total). It is a popular funding instrument specializing in DeepTech startups and small mid-caps which aim to finalize their product developments, enter the market and scale globally.

The EIC’s 2023 Work programme

While the European Innovation Council (EIC) has remained silent regarding the 2023 Work programme that is yet to be released, ScienceBusiness has published the second draft of the highly anticipated document dated July 2022. This article series is exploring some changes and interesting aspects of the EIC Accelerator that are relevant for startups and Small- and Medium-Sized Enterprises (SME) and for professional writers, freelancers or consultants.

ScienceBusiness has likewise published the entire library of Horizon Europe documents by the European Commission (EC) that are mostly in draft form and can be found here.

All the information and conclusions provided in this article are subject to change and the opinion of the author. The following statement by the EIC is part of the 2023 EIC Work Programme draft that this article is based on:

“This document represents a working draft of the EIC work programme for the purpose of feedback and comments from members of the Horizon Europe Programme Committee for the EIC and European Innovation Ecosystems. This draft has not been adopted or endorsed by the European Commission. Any views expressed are the views of the Commission services and may not in any circumstances be regarded as stating an official position of the Commission. The information transmitted is intended only for the Member State or entity to which it is addressed for discussions and may contain confidential and/or privileged material.”

Equity Financing under the EIC Accelerator

Equity financing is limited to a €15 million contribution by the EIC Fund but it is possible to request higher amounts in certain cases and especially those linked to the EIC Accelerator’s Strategic Challenges.

“The minimum investment component is EUR 0.5 million and the maximum is EUR 15 million. A more than EUR 15 million investment request is allowed in duly justified cases for: proposals in technologies that are strategic for the Union; where there is a global competition; and where the funding needs significantly exceed what is available in Europe.”

In the past, the EIC Fund had a variety of problems since applicants were not aware of how the equity financing would be implemented (read: An Inside Look into the EIC Fund). Successful EIC Accelerator blended finance applicants were under the assumption that the granted funding would be issued without additional conditions only to be asked to find their own lead investors. This became detrimental to some companies in this first batch because a lack of investor interest was why they applied to the EIC Accelerator in the first place and this is also what they explained in the application.

The EIC Accelerator required companies to justify why they cannot be funded elsewhere but then demanded they find funding elsewhere. Of course, the nuances are now clearer and the EIC has become more transparent which is of great benefit to applicants. The application template now clearly outlines the role the EIC aims to take and the conditions are well-described.

What is interesting is that the rule that the EIC Fund wants to invest with an external co-investor might change in the future, at least from the perspective of the applicant.

“The investment component of the EIC is designed to fill the funding gap for high risk innovations to a stage where they can be co-financed or financed under the InvestEU programme or by private investors alone. As the EIC accelerator is designed to bear the risk of potential breakthrough market creating innovations in order to attract alternate private investors in a second stage, the lack of such investors at the initial stage would not prevent the EIC investment to be agreed.”

While the definitions of the first and second stages are not clear (i.e. grant and equity, respectively), it can be interpreted as the EIC Fund investing in a company without any co-investors as a general rule. This could be in the form of a convertible note or loan as it was implemented previously or entail a direct equity investment.

Finding Co-Investors

The EIC has already outfitted their online platform with a list of investors and it is likely that the EIC wants to become a one-stop-shop for the full investment lifecycle. Especially past co-investors who have undergone due diligence alongside the EIC and European Investment Bank (EIB) can be collected and repurposed for future investments, thus generating a large network of compatible and strategic investors over time.

“You will also be offered the opportunity to share certain data and information with investors who have undergone a prior EIC due diligence process and who may wish to invest in your company or project and assist you in developing your idea into a business plan. You will also be asked to agree to share your relevant data with alternative funding bodies of your Member State or Associated Country.”

The language of developing your idea is interesting since the support of a strategic investor (i.e. those offering strategic support alongside financing) is very beneficial in early-stage projects stemming from Universities and other scientific institutions. If the EIC manages to build a network of strategic investors based on thematic areas (i.e. battery technology, ICT, medical devices, etc.) then this can greatly enhance the success of the funded projects and turn the EIC Accelerator into an actual business accelerator and not just in name.

The term idea is used very loosely by the EIC since TRL1 projects at the idea stage are not funded. It would be advisable if the EIC removes the term idea from the online platform as well since any company that is developing an idea from Step 1 into a business plan in Step 2 of the EIC Accelerator for the first time would likely not be successful.

The language should reflect that the project is far beyond the idea stage and has reached at least Technology Readiness Level (TRL) 5 or 6 and Business Readiness Level (BRL) 5 or 6.

Aligned with the approach of building an index of strategic investors, the 2023 Work Programme draft likewise outlines that the EIC will actively search for co-investors for the applicant.

“During this stage, and in particular if you have not yet secured other investors, the EIC Fund or the Agency will also look for other investors. You will be asked for your consent before other investors are contacted or engaged in negotiations.”

Loans from the EIC Fund

While the equity investments made by the EIC Fund already use in-direct modalities such as convertible notes or loans, it is still lagging behind in realising loans as a standard investment mode. Loans are expected to be released in 2022 or 2023 although these are of the same amount as the grant funding and seem to replace it with a repayable loan while their issuance is at the discretion of the jury in the Step 3 interviews of the EIC Accelerator.

“Reimbursable advances may be introduced during the course of 2022/23 in which case the terms and conditions will be made available on the EIC website. Once introduced, they would be considered by the jury in cases where the innovation cycle (market deployment) is short. The amount would be limited to a maximum of EUR 2.5 million and will reimburse up to 70% of the eligible costs of innovation activities. The reimbursable advance will have to be paid back to the EU on an agreed schedule as an interest-free loan. In case you are not able to reimburse or do not want to reimburse, the reimbursable advance will be transformed into equity. In case of bankruptcy, the reimbursable advance will be considered as a grant and hence written off.”

This approach seems to be a way of converting grant requests into loans which allows the EIC to fund more projects that they would have otherwise rejected (i.e. not innovative and DeepTech enough but a good business model or strong financial health).

It also allows the EIC to openly fund projects with lower risk profiles which is beneficial for Public Relations (PR) since these companies are more likely to be successful and funded by the EIC at no real cost.

It can also be a way to have more female CEO’s funded under the EIC which has been a priority and challenge for many years as well as allowing more funding for UK companies who are currently limited to grant-only support (read: UK Participation & Female Entrepreneur).

On the other hand, it is unfortunate that grant applicants now face the risk of receiving a loan after spending months in the application process and reaching the less than 10% of companies that make it to the Step 3 interviews. It would be reasonable if such counter offers are only formed in case the initial application has been officially rejected in Step 3 instead of the jury forcing a company to accept a loan in the interview prior to making a decision.

This article is part of a series whereas the remaining articles can be found here, once published:


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) are January 11th 2023 (only EIC Accelerator Open), March 22nd 2023, June 7th 2023 and October 4th 2023 under Horizon Europe. The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.

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

EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).

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by Stephan Segler, PhD
Professional Grant Consultant at Segler Consulting

General information on the EIC Accelerator template, professional grant writing and how to prepare a successful application can be found in the following articles: