Tips and tricks from the X2.0 and SynergistEIC experts

 

Following the news published last august that EIC Accelerator gives two additional weeks to the applicants to submit their proposals for the October cut-off, the X2.0 partners and FastTrack Ventures expert Giuseppe Mele, who is a partner in SynergistEIC project, but also part of the X2.0 community of Impact Builders, join efforts to highlight in a short article the most important points related to the funding opportunities that EIC provides to the European future innovation champions.

The X2.0 and SynergistEIC are “sister projects” both financed under call topic HORIZON-EIC-2021-STARTUPEU-01-01 – Enhancing synergies between the EIC and Startup Europe and are providing scaling and growth services to selected top-performing European deeptech startups in various areas. The focus of both projects is to strengthen the European startups ecosystem and the connection to EIC and the services it offers, with an overall result to boost the European innovation potential.

The X2.0 services will help the selected startups to better prepare for applying to the EIC Accelerator and be successful.

 

What is the EIC Fund?

The European Innovation Council (EIC) Fund is a financial initiative by the European Union aimed at accelerating innovation and technological advancements within Europe. It operates by providing equity investments and grants to high-potential, high-risk startups and small to medium-sized enterprises (SMEs) that are developing breakthrough technologies and innovations. The fund supports projects spanning various sectors, from healthcare and clean energy to digital technologies, fostering collaboration between private investors and public funding to stimulate economic growth and bolster Europe’s global competitiveness. It provides the financial backing for the projects selected through the EIC Accelerator program.

What is new compared to the SME instrument?

The main novelty in EIC Accelerator is the introduction of a blended finance option, that is, combining grant and equity funding. Grant-only funding of between €0.5 million and €2.5 million is maintained (up to a maximum project funding rate of 70%). Under the new blended finance option, the grant component in EIC Accelerator could be combined with a commercial equity component of up to €15 million. While activities from TRL 6 to TRL 8 will be funded by grants or blended finance options, close to market activities (that is, at TRL 9) will be only financed by equity participation.

How does the EIC Accelerator fund work?

Companies that apply and are successfully chosen as beneficiaries of the EIC Accelerator receive both grant funding and potentially equity investments from the EIC Fund. The grant funding supports the development and maturation of their innovative projects, while the equity investments provide additional capital to help these companies scale and grow more rapidly. This combined support mechanism, involving both grants and equity investments, aims to stimulate groundbreaking innovations, create new market opportunities, and enhance Europe’s position in the global innovation landscape.

What types of funding does the EIC Accelerator provide?

The EIC Accelerator provides startups with a unique blend of grant funding and equity investment. Successful applicants receive a non-repayable grant that supports the development and maturation of their innovative projects. Additionally, selected startups have the opportunity to secure equity investments from the EIC Fund, which aims to accelerate their growth and facilitate market entry.

What is the maximum grant that a company can receive?
The EIC Accelerator offers start-ups and SMEs grants of up to less than €2.5 million combined with equity investments through the EIC Fund ranging from €0.5 to €15 million or more.

What is the success rate of the EIC Accelerator?

Besides, while the Step 2 success rate increased to 33.40% as 159 companies reached the interview, only 32 companies were finally funded (20% success rate). The interview has therefore become the most challenging step in the last call. The reasons for this change in success rates have not been made public by the EIC.

What are the benefits of EIC Accelerator?

The benefits of the EIC Accelerator rely on its unique mix of resources that allow successful startups to finalize their development journey of breakthrough technologies and to bring them to the market. The financial resources available for each project are huge, in fact, it is possible to get up to 17.5m€ of blended finance (2,5m€ grant and 15m€ equity participation), but the EIC Accelerator is something more than just a funding instrument, it represents an investment catalyst increasing the investment readiness and appeal of high-potential high-risk startups able to attract investors and build the technological future of Europe.

What are the common mistakes to avoid during the application process?

There are common mistakes that the companies should avoid when applying for the EIC Accelerator, to name a few:

• Underestimating Innovation: Failing to clearly demonstrate the innovative nature of the project and its potential to create a significant breakthrough in its field.
• Neglecting Market Impact: Not adequately showcasing the project’s potential societal and economic impact on the market and industry.
• Weak Business Planning: Providing an insufficient or unclear business plan that lacks a well-defined market strategy, revenue model, and growth projections.
• Budgeting Errors: Presenting a budget that is unrealistic, inadequately justified, or doesn’t align with the proposed project activities.
• Neglecting Evaluation Criteria: Not directly addressing the evaluation criteria outlined in the application guidelines.
• Premature Project Status: Applying with a project that isn’t sufficiently developed or lacks a clear path to market readiness.
• Eligibility Issues: Applying without ensuring that the project and the company meet all specified eligibility criteria.
• Weak Team Composition: Having a team without the necessary skills and expertise to successfully execute the project.

 

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