The EIC Accelerator blended financing (grant and equity) has undergone a dramatic transition from its first inception out of the now obsolete SME Instrument Phase 2 in 2019 and its following test phase as the EIC Accelerator Pilot in 2019/2020. With a new application process that includes multiple steps, an online AI platform for the submission and a video pitch, it has changed not only its process but also its outcomes (read: AI Tool Review). With the evaluation and the proposal template having changed alongside this newest iteration, it is clear that what worked in 2020 and earlier phases might not be applicable in 2021. Clearly, the proposal looks different, prioritises a pre-determined structure over a free business plan narrative and defines a specific roadmap that all companies have to adhere to. But the factor that might have the most significant impact on the newest changes of the EIC Accelerator might be the evaluation itself. Moving away from the SME Instrument Phase 2 and EIC Accelerator Pilot The aim of the new Step 1 of the EIC Accelerator is a quality check of applications to identify if the project is of interest to the EU and if it fits the general risk, innovation, team and market criteria. As such, it was initially advertised as being a way of emulating the old Seal of Excellence* which was awarded to 2020 projects with an evaluation score of at least 13 out of 15. Historically, 30% to 50% of all submitted projects between 2018 and 2020 reached this level. The current Step 1 success rates of 60-70% match this threshold rather well although one could argue that the equivalent old score would rather correspond to a 12.5 and not a full 13. Still, Step 1 acts as a threshold that is partially replacing the old scoring but also has a distinctively different focus when it comes to project quality. This quality aspect can be investigated through a simple question: Will resubmissions of 12.5+ scored applications from 2020 automatically do well in the 2021’s Step 1? *Note: The new Seal of Excellence is now only awarded to some companies that reach Step 3 of the evaluation process, namely the interview stage. The 2021 Seal of Excellence is not associated with the Step 1 short application or with any type of scoring but acts as a useful analogy to the previous iterations of the funding program prior to 2021. Transitioning from 2020 to 2021: Thresholds and Quality The EIC has stated that Step 1 is designed to “trigger the interest of evaluators” which means that it is a very surface-level assessment compared to even the old SME Instrument Phase 1. There are only 5 simplified evaluation criteria in Step 1 while the 2020 evaluations had to address 17 very detailed criteria. One could argue that the newest evaluation criteria which directly define the success of projects are now heavily favouring innovation, risk and the market while the old criteria were looking at every aspect of the company and project with equal weights. Without a judgement as to the benefit or tradeoffs of this approach, it clearly impacts what types of projects will succeed and it will likely be very different from what was observed in 2020 as well as the decade before (read: Recommendations for the EICA). Some interesting cases of applicants who have applied to the EIC Accelerator have surfaced whereas a 2020 submission that showed low scores of 10 to 11 out of the maximum of 15 passed Step 1 in 2021 with very positive reviews. What is interesting is that such low scores in 2020 were often treated as a lost cause in the eyes of professional writers or consultancies since it means that either the project lacks the sophistication needed to convince the European Innovation Council (EIC) or the startup or Small- and Medium-Sized Enterprise (SME) does not have a well-thought-out business model or financial planning. Changing the Evaluation Criteria With the first stage being designed to only peak the evaluator’s interest, many projects which would not have been considered for funding in 2020 even if the European Commission (EC) had excess financing available can now easily pass the first stage. How this will change in Step 2 is unclear but what can be said is that the evaluation criteria have changed significantly. In 2020, there were 17 detailed criteria that covered the entire business model ranging from the subcontracting over the partner network to the details of the customer base (read: Companies That Should Not Apply). Questions were highly detailed and covered: Why would customers buy from you? Is your business model able to scale your company? Is the strategic plan for the commercialisation sufficient? Are any IP or licensing issues addressed? Is the product easy to use? … This has been replaced by 13 criteria in Step 2 and only 5 in Step 1. Instead of asking very nuanced questions to the evaluators who have to grade the complete project in increments, the new criteria are simplified and focus on many of the same questions albeit with less detail. Interestingly, the new criteria omit gender equality, broader benefits in the EU and societal challenges. These were explicit in the old evaluation criteria but are now non-existent even though they must be described in the Step 2 application. This is likely due to the new Strategic Challenges and female-CEO quota that is enforced in the back-end and must not be re-iterated in the evaluations front-end. The “Go” Criteria There clearly is a different focus in the new evaluation criteria with a strong preference for the risk, market, innovation and the team with instructions for evaluators being that a Step 2 Go should correspond to what would have been a 4.5 to 5 score under the 2020 rules.** To revisit the anecdote mentioned above, an application with a score of 10.5 would have had average scores of 3.5 for each section which means that it should not stand a chance to … Read more
