The Profile of a Company That Should Not Apply for the EIC Accelerator (SME Instrument)
The EIC Accelerator blended financing (formerly SME Instrument Phase 2, grant and equity) is a highly competitive but also highly popular grant and equity financing scheme by the European Innovation Council (EIC). Many startups and Small- and Medium-Sized Enterprises (SME) in the EU but also in associated countries such as Israel or Norway are interested in applying to the funds but many would be better off seeking out other options. While grant consultancies and professional writers all have different approaches to the selection of suitable EIC Accelerator applicants, there are some common themes that are shared among success-oriented grant consultants. Since the official grant proposal template for the EIC Accelerator does not clarify such nuanced points in-depth, the following article aims to give an overview of the types of companies that should not apply. For any startup or scaleup that is recognising themselves in any of the points listed below, it would be advisable to refrain from hiring a writer or consultant since time and resources can be better spent elsewhere. Note: The EIC does not primarily select great companies, it primarily selects companies that fit a certain mould. Having low chances for success under the EIC does not mean that the company or project are bad. The EIC would have never financed social networks like Facebook or Twitter and even industry-specific unicorn companies like Epic Games or Instacart. Yet, these are all success cases on a level the EIC dreams of. The list below is designed to highlight the first impression that consultants and grant writers often face when a client first comes into contact. Since the demand for grant writers is generally very high, this first impression will likely define how interested the consultancy is in a particular project. How do they present their company or technology? Why do they need EIC Accelerator support? What needs to be financed? 1. An Inquiry Uses a Gmail or Similar Domain Address While this is not a strong red flag – it suggests that the company or project is not fully formed yet. Buying a domain and creating a private email account usually precedes even the company registration since it is so simple (and cheap). If an inquiry lacks a private domain then this is usually a sign that a project is in the idea stage. Very few founders would contact investors or customers with a Gmail address which means that any inquiry from such an address is a tell for an ineligible project. Since 2021, the EIC Accelerator also funds non-incorporated natural persons but, due to the competitiveness of the grant, this does not mean that a single person without backing, traction or support networks will be able to be successful. Every inquiry that comes from a domain that is not privately hosted and is not attached to a Corporate Identity (CI) will likely be ignored by selective consultancies. 2. The Prospect EIC Accelerator Applicant is in the Idea Stage The new EIC’s AI platform aims to display the journey from Ideation towards Go-to-Market but that does not mean that a natural person can be successful with a pure idea. The Technology Readiness Levels (TRL) clearly outline the stage a technology has to be in with TRL5 being the minimum for the EIC Accelerator and lower TRL’s only being possible in EIC Pathfinder and EIC Transition programs. The current diagnostics and ideation parts of the EIC Accelerator application are misleading since they can give the impression that projects can still be in the idea stage and is then transformed into a commercial product once Step 3 is reached but this is not the case. The applicant’s project will not make significant changes from Step 1 to 3 – the only thing that will change is the amount and depth of data that is provided to the EIC for evaluation purposes. The EIC Accelerator, also a misleading name, is not a traditional accelerator that aims to help startups succeed by helping with product development, investor relationships or customer contact. The primary resource, outside of limited coaching, will be financial which means that the applicants need a business plan, the right commerial strategy and must have all it takes to implement the project. The EIC will not hold the beneficiaries hands albeit they will aim to create networking opportunities if it matches current political agendas such as the Green Deal, COVID-19 relief or similar trends. Having an idea and reaching out to a consultant with a half-formed business plan will likely be insufficient and be ignored by most selective writers. 3. The Company has no Website or Social Presence It is understandable that many companies are in stealth mode especially when it comes to DeepTech products in the area of biotechnology or pharmaceuticals where large competitors spend billions on R&D and could copy a technology quickly – patented or not. Still, even if a company has no interest in marketing itself or in publicising its technology, every company that has sufficient seed funding and the degree of traction needed to succeed in the EIC Accelerator should have a website and a LinkedIn page at the very least. There can be exceptions but no presence at all often means that founders view this project as a side business or are not invested in its success. One additional exception to this is a newly formed company that is a University spin-off or subsidiary of another company. In the latter case, the prospective applicant can usually provide a website link for the parent company while, in the former case, they could be too early stage for the EIC Accelerator but can be eligible for the EIC Pathfinder. 4. Based on Research that is not Theirs (a University Non-Spin-Off) What can often be encountered is a company that is basing its technology on University research that is not theirs but also does not exist in the market yet. This, in and of itself, does not mean that it is ineligible for the EIC Accelerator but … Read more
