The EIC Accelerator: Grant vs. Blended Financing (Equity) Posted on March 20, 2020October 14, 2020 By Stephan Segler, Ph.D. Here are the answers to some frequently asked questions regarding the equity financing option of the EU’s start-up grant (SME Instrument, EIC Accelerator). The EIC Accelerator offers the application for either a pure grant or blended finance (a mix between a grant and equity-based financing). While the application and reviewing process for both options is the same, the financing for the grant (€2.5m) and for the equity contribution (€15m) originate from different sources so the criteria for a successful proposal are also slightly different. While the grant is requested as is, the equity financing is based on an “offer” whereas the proposal details the overall equity contribution requested and presents an offer regarding the company shares which are provided in exchange. As such, the equity contribution requires more information compared to a simple grant application and the major points to consider are: Amount of Ownership Offered: The guidelines suggest to offer a minority ownership of at least 10% and up to 25%. Exit Strategy: There is a specific section in the proposal which asks you to describe your exit strategy or your plans for the company once it has been scaled. The EU is looking at 7-10 year time frames regarding the ROI with a maximum of 15 years. Exit strategies can be buyouts, IPO’s, liquidations, etc. Company Valuation over Time: You are asked to describe the progression of your company valuation using past data and your future projections, including the reasoning behind them. No revenues and non-bankable: The equity contribution is directed at high-risk companies with limited or no turnover and negative EBITDA’s. This usually excludes profitable companies which are only seeking scaling support and rather targets research-heavy projects. It also defines high-risk businesses as having no interest from the market or investors just yet. TRL9 activities: The equity financing is exclusively targeted towards Technology Readiness Level 9 (TRL9) activities which relate to market deployment as opposed to technical developments. This, in turn, means that if a grant is requested for activities related to product deployment and marketing then this will either be ineligible or will be transferred to equity financing. There are some other minor things to consider when applying for equity financing but the points above cover the most important parts. This article was last modified on Oct 14, 2020 @ 12:39 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 Open now: Apply as soon as possible to be eligible for a Step 2 submission Step 2 (closing 17:00 Brussels Time) 1st cut-off 2025: Approximately January or March 2025 2nd cut-off: - 3rd cut-off: - 4th cut-off: - Step 3 1st cut-off: - 2nd cut-off: - 3rd cut-off: - 4th cut-off 2024: January 13th to 17th 2025 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, PhDProfessional 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 Phase 2 SME Instrument / EIC Accelerator EIC Accelerator equityEIC Accelerator financingEIC Accelerator grantIndustries & CompaniesInvestorsSME Instrument Phase 1Timelinetip#19
EIC Accelerator How a Consultant can Produce an EIC Accelerator Pitch Video Remotely (SME Instrument) – Part 2 Posted on February 10, 2021February 4, 2021 This article is a continuation of Part 1 and presents a proposed workflow for the creation of a pitch video for the EIC Accelerator blended financing program (formerly SME Instrument Phase 2 – grant and equity financing). Due to the new process under Horizon Europe (2021-2027), the pitch video will… Read More
EIC Accelerator Finding Updates and News for the EIC Accelerator (SME Instrument Phase 2) Posted on July 27, 2020February 19, 2023 The European Commission has a variety of channels where updates and news are published. For the EIC Accelerator (SME Instrument Phase 2), there is not a single, centralized source of information but a variety of fragmented channels which should be scanned periodically in order to remain up-to-date on recent developments…. Read More
EIC Accelerator EIC Accelerator: New Proposal Template from March 20th (2020) Posted on March 26, 2020October 14, 2020 The new proposal template for the EIC Accelerators Green Deal deadline on May 19th has recently been released and this article summarises the major changes. New Form Fields: The first change is found in the application forms under “Call Specific Questions” where it is now required to provide the gender of… Read More