The EIC Accelerator Pilot
When the EIC (European Innovation Council) was launched in 2015, its mission was to enable Europe’s scientific discoveries to scale up faster. One way they supported this goal was through the SME Instrument. Over the last years, this grant has become one of their most important instruments to support early-stage companies to develop their ground-breaking ideas.
The commission recently published their future plans for an Enhanced European Innovation Council (EIC) pilot. They will be piloting two new schemes: the EIC Accelerator Pilot for supporting high-risk innovation and the EIC Pathfinder pilot for researchers with “radical” ideas.
Some background on the SME Instrument
The SME Instrument supports innovative early-stage SMEs. The programme consisted of two phases. In the first phase SMEs can apply for a grant of € 50.000,- to fund a commercial and technical feasibility study. The second phase funds up to € 2.5 million for innovation projects, focussing on a new idea (product, process or service) that can be launched on the market when the project is finished. To apply, a business case and commercial plan were compulsory that was being reviewed by experts from the field.
In 2018 the programme piloted an additional evaluation step: a face to face interview with a panel comprising experienced investors and experts from the SMEs respective fields. The advantages were two-folded: the interview allowed for a better assessment of the entrepreneurs & their plans and by adding an investor to the reviewing committee, a more commercial perspective was brought into the evaluation.
What will change?
Building on the learnings from the pilot in 2018, the SME Instrument phase 1 will be phased out. The last submission deadline will be on the 5th of September 2019. Therefore, the EIC Pathfinder pilot will be an alternative to SME phase 1, aiming to collaborate and drive interdisciplinary thinking amongst innovators and researchers. The phase 2 programme is being rebranded as the EIC Accelerator Pilot, innovators and researchers are encouraged to apply for the Accelerator Pilot once initial success has been achieved.
The Accelerator programme
The Accelerator Pilot will consist of blended funding, a combination of grant and equity, and aims to bridge the funding gap for disruptive innovators. The total budget of this programme is € 1.3 billion for 2019 – 2020. The next cut-off date for the Accelerator programme is set on the 9th of October 2019. With this programme, the EIC aims to support innovation that is too early or too high risk to pass the ‘bankability’ assessment of programmes like InvestEU or COSME.
The indicative range of grant funding is between € 500,000 to € 2.5 million (or more), co-financing up to 70% of the eligible costs. Funding between between € 2.5 – € 15 million will be made available through equity. Innovations should already be at a TRL-level 6 or above. Eligible activities include product/service development, trials, prototyping, validation, demonstration and testing in real-world conditions, and market replication. If an SME is benefiting from the Accelerator Pilot, they will also receive 12 days of coaching and mentoring by an allocated expert in their area.
The benefits of blended funding
Building a successful SME is hard. The statistics are well-known, 90% of start-ups fail. Building a business based on a single innovation is not just about having a great idea, it is also about getting to know your market, the value that is being created for that market, figuring out your identity as a company, building a team, presenting the company and managing it.
Becoming an entrepreneur is not just about technical know-how, it is also about building a broad skill set needed to build and grow all aspects of a company. Although grant applications include the business case of an innovation in their evaluation, they don’t necessarily look at the return on investment (ROI). When translating your business case to financial forecasts and the annual ROI, it reinforces the importance of checking all the assumptions an entrepreneur has made. As a result there is much better sense of the potential success.
Apply for the Accelerator pilot
We therefore highly support companies to apply for the Accelerator pilot. It is the most competitive instrument out there. Yet writing this application and figuring out your potential future return on investment will be a thorough check of your business case, – a worthy investment in and of itself!
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