The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) has transformed greatly in 2021 and its new AI tool has been used by thousands of applicants in a matter of weeks. While the previous article pointed out some of its shortcomings and the overall experience, the following article aims to make suggestions for its improvement (read: Reviewing the EIC Platform).
From a business perspective, startups and Small- and Medium-Sized Enterprises (SME)’s have to, by necessity, pursue a realistic and business-focused approach to succeed in their venture but if a grant application forces them to create a project analysis that is neither relevant for their business nor to investors or customers then it cannot be a useful approach overall.
From the public funding agencies perspective, the great challenge of creating a framework for grant applications is to encourage the right companies to apply but to also have sufficiently high barriers in place that can filter based on factors other than the budget alone (i.e. we do not want to fund you vs. we do not have enough money for you).
Many companies look at the EIC Accelerator and immediately dismiss it because it is time-consuming and the chances for success are too low for the current stage of their business. They need to protect their time and resources since what they work on is cutting-edge and has a high risk of failure.
There is a risk that competitors are getting ahead and it can often be more valuable for the company to convince risk-averse Angel investors or customers as opposed to spending many months in filling out EIC form fields just to fail because the CEO has the wrong gender, an evaluator does not understand the 1,000 characters on the customer pain or the Technology Adoption Lifecycle (TALC) just makes no sense for their particular commercial model.
While many great companies have been funded by the SME Instrument and EIC Accelerator, there clearly is room for improvement for the European Innovation Council (EIC) and European Innovation Council and SMEs Executive Agency (EISMEA). Here are some suggestions as to what could make the process easier of applicants and evaluators:
Guidelines and Templates
While working with an official proposal template for the EIC Accelerator is now redundant since the EIC platform acts as an on-the-fly guideline, there is still a need for further explanations as to what is needed in each section.
- What is a suitable gender equality strategy in the eyes of the EIC? Since this is not taught in MBA’s and practically no VC would ever ask this question – what does a DeepTech cutting-edge business working on a disruptive innovation need to display to satisfy the EU?
- How does the EIC want applicants to quantify their cash flow projections for The Chasm or The Gap between Early Adopters and the Early Majority? How is the space between two market adoption segments meant to be quantified in the eyes of the EIC?
- What market activities are needed before TRL8 in comparison to market activities in TRL9 as these are mandatory? How should the mandatory project management differ between TRL5-8 and TRL8-9?
These are examples of questions that could be addressed in a grant application template or guideline which helps applicants to address questions they, frankly, will never need to answer outside of the European Commissions (EC) funding arms.
Being More Reader and Writer Friendly
When the EIC announced that it would create an AI Tool and interactive application platform that aims to make everything easier – it seemed like a great idea. Writing a business plan was tedious and took a lot of time which meant that applicants had to spend valuable resources on writing that could have been spent on growing their business or technology.
Adding video pitches, a short application as a teaser and integrating an automated AI assessment that screens patent and scientific databases seemed like great news for applicants. For a brief moment, it seemed like many applicants could finally prepare great applications on their own without the reliance on professional writers or consultancies.
But this turned out to be a very short-lived scenario. As opposed to making the applications more writer- and reader-friendly, it became even harder to read and to write. Instead of adding more audiovisual content to the applications, heavily relying on graphics and making things easy to digest, the EIC removed all of the images, formatting, hyperlinks and headings to yield an application that is 99% plain text.
No formatting. No colour. No graphics. No hyperlinks. No references. Just plain text.
The solution is simple: Allow the upload of graphics and illustrations in key sections.
- Do you have a software with a UI? Upload up to 5 screenshots, please.
- Do you have a reactor? Please provide photos of the prototype.
- Do you have an AI-driven infrastructure innovation? Please upload a schematic view that conceptualises your product.
- Do you have competitors? Please upload a comparison table.
Note: There is an auto-generated competitors table on the Step 2 platformin but it only shows checkmarks or crosses – no nuance.
It comes as a surprise to many that allowing image uploads was not in the top 5 of features to be added to the EIC Accelerator platform as soon as it was launched. Yes, there is a pitch deck and yes, there is an Annex in Step 2 of 10 pages but there is no guarantee that the evaluators will read the text and then search for a relevant graphic in the other documents. In fact, graphics are supposed to compliment the text as it is being read. They should not be an afterthought.
It is hard to believe that the EIC consulted their evaluators regarding the AI platform in any way. No evaluator would have ever supported the removal of all visual support materials just to end up with a 99% plain block of text.
Minimize the Text
What is urgently needed is to remove text segments that have very high overlaps (i.e. market growth vs Compound Annual Growth Rate can be merged), duplicates (addressing the customer pain point in the value chain and in the competitor section) or are just redundant (planning for gender equality in a startup – this type of social equity is a luxury considered by large companies, not by startups that still struggle to succeed).
As mentioned above, balancing the access to grant financing and still encouraging the right companies to apply is a challenge but just increasing the effort of preparing the application is not the way to go. If the EIC simply increases the effort of applying then they will end up with companies who do not mind getting distracted from their main business – are these the companies Europe wants?
The incentives along the path of reaching a goal will define the outcomes more so than the goal itself.
Instead of increasing the effort of the application even further, why not reduce the effort and focus on improving the evaluation process? There is always a give-and-take between the effort of preparing an application and the effort of its evaluation. But thus far, it seems like the EIC is focusing on increasing the efforts of the applicants rather than improving the evaluator’s pool, training or process. How can the project that a VC sees in an interview or live pitch be encapsulated into a proposal? Is the flaw found in the way proposals are written or in the methodology and pool of evaluators?
Note: The EIC is clearly training its evaluators but, since it is not transparent regarding their selection, vetting and training, it seems like this is not a primary effort. Otherwise, the EIC would have advertised its progressive evaluation process already.
Maybe the solution lies in the simple submission of a first 5-pager and then to allow two rounds of feedback between the applicant and the evaluator to allow for specific questions to be answered. If the answers are satisfying, the applicants can move on directly into the interview.
Whatever the solution is, adding more text that forces every startup to fit into the same mould cannot be the optimal path to take.
Collaboration Features and Backups
So far, applicants usually work inside an offline document and copy-paste their content into the platform. There are a variety of reasons for this.
Firstly, there is a high risk that the EIC Platform accidentally deletes content, the autosave is insufficient or the writer simply loses the overview since there are too many tabs, hidden sections and collapsed text fields.
But a major reason as to why applicants cannot co-work on the platform and use this as their main place of writing is simple: There are no commenting and collaboration features.
If the CEO wants to tell the CFO to check the cash flow and market while the CTO has to improve the customer pain points – how would they communicate this? In GoogleDoc’s it is easy to have as many people as are needed comment, assign tasks and create trackable editions including version control. It is also easy to download an editable PDF or DOC file to have a backup that can be used in other projects.
So far, the EIC allows collaboration by sharing editing rights with any person who has been invited. This works very well but it does not allow communication or any of the features listed above.
What would be useful to applicants at the very least would be:
- Simple commenting and assignment of tasks throughout the documents
- Downloading the entire application as a PDF and DOC file at any time
While there are great plugins for most browsers such as Grammarly, a spellcheck feature could be easily integrated into the platform to avoid errors. It could even be centralised in a specific segment where the applicants can just look at all potential typos and grammatical errors across the whole document.
Suggestions Specific to Step 1
Display the application exactly as it is seen by the evaluators. If they have to dig for content then show applicants how it will be displayed so that they are prepared. If things are not shown or omitted then let the applicants know ahead of time so that they do not need to place much thought into it. If a certain percentage of evaluators do not dig further then let applicants know what the chances are, in percent, for the content being seen.
Provide a guideline for the video shooting that allows non-technical people to prepare a video. What camera should they use? Should they show their face or is audio-only ok? Do they need to show their offices/facilities? Do they need to show titles and logos on screen?
Adobe Rush or Adobe Spark provide simple solutions for video recording and editing that does not require a steep learning curve like professional editing software. Maybe the EIC can invest in a free 2-week trial collaboration with Adobe for all first-time EIC applicants who have a new PIC? Or simply providing a support system with tips and tricks for non-marketing-heavy DeppTech companies on a limited budget?
Suggestions Specific to Step 2
Submissions and Updates
In 2020, submitting an application was not final. In fact, one could always re-upload the application with little risk even minutes before the deadline. With the AI platform, there are too many glitches to safely withdraw an application and resubmit it again on a short deadline. How about a simple Update Application button in Step 2 which does not require the withdrawal of the entire proposal?
This way, applicants can be secure in knowing that they have already submitted but can calmly re-read everything and improve typos or errors in the technical descriptions. While this makes no sense in Step 1, it is highly relevant in Step 2 where rushing towards a deadline will be a common reality in 2021 and 2022.
In 2020, companies would be aware of the application deadlines and would start the preparation 1 to 2 month in advance but this timeline is now redundant if Step 1 must be passed prior. Considering a minimum of 11 weeks before the deadline to start the preparation of Step 1, Step 2 applicants will be bound to rush which means that close calls will often frustrate them if they cannot simply update texts.
Removing Specific Sections
Using this model seems like a good idea on the surface but, in practice, it does not make sense for many businesses. This part, in particular, is more akin to an MBA’s thesis assignment rather than what a founder has to integrate into the business model or to present investors.
Remove the Gender Equality Section
Most companies will write what the EC and EIC want to hear but 99% of DeepTech companies have never thought about this, will never think about this and do not care about it in any way.
Once a written section becomes generic for all applicants, it becomes irrelevant for an application.
There are many overlaps in the application especially when it comes to customer pain points and gains. There are only so many ways to describe the same thing. To mention the same cost-benefit. To mention the same emission savings.
Forcing applicants to repeat themselves leads to either (1) repetitive and boring applications or (2) applicants making things up to sound impactful. Both are neither in the interest of the EIC nor the evaluators.
The articles found on Rasph.com reflect the opinions of Rasph or its respective authors and in no way reflect opinions held by the European Commission (EC) or the European Innovation Council (EIC). The provided information aims to share perspectives that are valuable and can potentially inform applicants regarding grant funding schemes such as the EIC Accelerator, EIC Pathfinder, EIC Transition or related programs such as Innovate UK in the United Kingdom or the Small Business Innovation and Research grant (SBIR) in the United States.
The articles can also be a useful resource for other consultancies in the grant space as well as professional grant writers who are hired as freelancers or are part of a Small and Medium-sized Enterprise (SME). The EIC Accelerator is part of Horizon Europe (2021-2027) which has recently replaced Horizon 2020. Previously, the EIC Accelerator was named SME Instrument Phase 2 whereas Phase 1 was discontinued in 2019. It should also be noted that the current Steps of the EIC Accelerator application do not correspond to the Phases that were available in 2019 but only act as additional evaluation thresholds for the project's assessment.
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