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.”
EIC Accelerator Applicants
While the EIC Accelerator does fund software products and services, it has retained its focus on funding groundbreaking DeepTech innovations based on scientific breakthroughs and discoveries.
“EIC Accelerator focuses 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’)”
Non-Associated Third Countries
Next to investors and natural persons associated with an SME in an eligible country or those who are meaning to establish an SME, there are now also new eligibility criteria for other entities and natural persons from non-associated countries. It has long been possible to apply as an investor, a natural person or a parent company as long as the beneficiary, a company registered in a Horizon Europe-associated country, is established prior to signing the grant agreement contract (i.e. after the Step 3 interview was successful).
This allowed persons and entities from countries associated with Horizon Europe to pass through all three steps prior to committing to the creation of a new legal entity. This is, of course, desirable since the success rates of passing through all three Steps of the EIC Accelerator can easily drop below 5% (read: EIC Accelerator 2022 Results).
In the newest Work Programme, the EIC is expanding the rules to allow entities or persons from non-associated third countries (glossary) to apply to the EIC Accelerator if they relocate their headquarters or establish an SME in a country associated with Horizon Europe.
“One or more natural persons (including individual entrepreneurs) or legal entities, which are: From a non-associated third country intending to establish an SME (including start-ups) or to relocate an existing SME to a Member State or an Associated Country. Your company must prove its effective establishment in a Member State or an Associated Country at the time of submission of the full proposal. The Commission may set specific conditions and milestones in the contract to ensure that the interest of the Union is met.”
In contrast to the way natural persons and investors are able to proceed with the full application process up to the final step, non-associated third countries must create a legal entity prior to applying with a Step 2 full application. In the sight of the low success rates of this step, it is not advisable to relocate a business headquarters or create a legal entity prior to gaining any official approval from the European Commission (EC) and the EIC.
Globalization of the EIC Accelerator
Third countries should not take this risk unless there is another strong reason to relocate their headquarters even if the EIC funding is not granted.
It could be seen as beneficial to apply to Step 1 of the EIC Accelerator as a way of assessing the quality of a project and determining the odds of future success but it is still not recommended since the correlation of scores between all three Steps can be small while Step 3 can entirely shift the evaluation criteria (read: EIC Accelerator Interview). The final decision makers will only assess the project in Step 3 and not be involved in Step 1 or Step 2 so any assessment in Step 1 has limited predictive power.
But it is understandable why the EIC is adding this restriction. One of the major goals of the new submission system developed by the EIC and implemented in 2021 is to reduce the number of applicants and to simplify the application and evaluation process (read: The 2021 EIC Accelerator). If the EIC were to open up the full process including Step 2 (full business plan) and Step 3 (face-to-face or online interview) to major American and Asian markets then they would be overwhelmed with tens of thousands of global applicants who try their luck.
In fact, this new rule and the opening up of Step 1 might already overwhelm the Step 1 evaluations since, technically, any company from third countries not associated with Horizon Europe can apply which should lead to a rise in Step 1 applications.
Combined with the effort of the EIC to gain global notoriety through the participation in international conferences (i.e. European Pavilion at CES Las Vegas) as well as the lack of communication on the actual success rates of the program for each Step (read: June 2021 EIC Accelerator Results), it is only a matter of time until the number of Step 1 applications will skyrocket.
This article is part of a series whereas the remaining articles can be found here, once published:
- The Eligible Applicants (2023 EIC Accelerator Work Programme Part 1)
- How Grant-First Projects get Equity Investments (2023 EIC Accelerator Work Programme Part 2)
- The Conditions for EIC Equity Investments (2023 EIC Accelerator Work Programme Part 3)
- Technology Readiness Levels, Timelines and Interview Priorities (2023 EIC Accelerator Work Programme Part 4)
- Cancelling Funding and Changing Grant Requests (2023 EIC Accelerator Work Programme Part 5)
- The Grant Proposal Evaluation Criteria (2023 EIC Accelerator Work Programme Part 6)
- The EIC’s 2023 Strategic Challenges and Topics (2023 EIC Accelerator Work Programme Part 7)
- The New EIC Ecosystem, Fast-Track and Pilot Plug-In Schemes (2023 EIC Accelerator Work Programme Part 8)
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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)
- 1st cut-off: -
- 2nd cut-off: -
- 3rd cut-off: -
- 4th cut-off: October 19th 2023 (extended)
- Step 3 (interview)
- 1st cut-off: -
- 2nd cut-off: -
- 3rd cut-off: October 2nd to 6th (extended)
- 4th cut-off: November 27th to December 8th
The Step 1 applications must be submitted weeks in advance of Step 2. The next EIC Accelerator cut-off for Step 2 (full proposal) can be found here. After Brexit, UK companies can still apply to the EIC Accelerator under Horizon Europe albeit with non-dilutive grant applications only - thereby excluding equity-financing.
Contact: You can reach out to us via this contact form to work with a professional consultant.
EU, UK & US Startups: Alternative financing options for EU, UK and US innovation startups are the EIC Pathfinder (combining Future and Emerging Technologies - FET Open & FET Proactive) with €4M per project, Thematic Priorities, European Innovation Partnerships (EIP), Innovate UK with £3M (for UK-companies only) as well as the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) grants with $1M (for US-companies only).
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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: