Should you apply for the EIC Accelerator or not? The question is harder to answer than it looks. The EIC Accelerator is a very selective funding programme, usually funding innovation and deep tech, but it advertises itself very broadly. When you read about it, you feel like almost everybody is a fit, because the messaging talks about innovation, about European leadership and about companies in Europe that bring innovation forward. The marketing is so broad that it is very difficult to self-filter.
There are two ways to answer the question: your funding situation and strategy, and whether you are actually eligible and a fit for the programme.
Never Rely on a Single Funding Opportunity
Whether you apply for any grant, talk to investors or try to find VCs, any single funding opportunity should never be the only thing you do. You should never put all your eggs in one basket, and that is as true for investors as it is for grant funding.
The EIC Accelerator Is Not a Rescue Fund
If you decide to apply for the EIC Accelerator, do not be in a situation where you say: I am going to be bankrupt in three months, I need money now, so I am applying for the EIC Accelerator. That is not what it is for. The EIC wants a company that is not going to go bankrupt soon. You should have a sufficient runway, because the process also takes quite a bit of time.
The EIC Wants to Be Part of the VC Story
The EIC wants a company that is also talking to investors. It wants to be part of the VC story. A company that says it is not actually looking at private funding at the moment is usually a red flag.
You want to be a company that is actively looking for private funding and has probably already raised some type of private funding in order to get off the ground.
Think Long Term
Generally speaking, you should have a long-term financing strategy. It can include grants, it can include investors, and it can include early revenues, but you should think about it long term.
If you are thinking short term instead, with one thing you are trying to get and the knowledge that if it does not work out you will go bankrupt, then you should definitely not apply.
The Grant Is Non-Dilutive, but Investors Still Matter
A point often made online is that the EIC Accelerator grant is non-dilutive, and that is true. For the grant you do not give up any ownership. That is great, because you do not dilute your cap table and you do not have to give anything up. You are simply getting money for the project you are going to execute, which is not taking anything away from you but adding to the company, because the project benefits you in the long term as well.
You are also allowed to apply for grant only, which means you are not asking for equity at all. But the EIC still wants you to have a funding plan after the grant, which usually means private investors, and that usually means giving up ownership.
So if you are in a situation where you say you are not talking to private investors at all, that you just want a non-dilutive grant from the EIC Accelerator and use it as a substitute for a venture capitalist, that is usually also a red flag. The EIC wants both: either you take equity from the EIC and from private investors, or you take the grant from the EIC and then get equity financing from private investors to scale.
Whatever you do, it is likely that in the evaluation process you will notice that investors are a very important part, even if you do not ask for equity financing. Even for a grant, it is important that you have connections with investors and that investors are on board, in order to solidify the narrative of the proposal, but also for your company.
If You Urgently Need Money, Do Not Apply
Back to the first question: should you apply for the EIC Accelerator if you urgently need money right now and you are burning the candle at both ends? Obviously not. That is not a good starting point for an EIC Accelerator application.
Are You Eligible?
The second question is whether you are eligible, which is a very broad question. Put simply:
- Location: you have to be in an associated country, meaning the EU but also countries associated with the European Union, including the UK, Switzerland, Norway and others.
- Company size: you have to be an SME, a small or medium-sized enterprise.
- Technology readiness: you should be at technology readiness level 6, meaning you have some type of prototype that has already been validated.
What exactly TRL 6 means is very much case by case, because it depends on the technology. You cannot validate every technology the same way, and you cannot define a prototype the same way for every innovation, because it can be software, hardware, medtech, quantum computing or many other things. Whatever it is, it is usually somewhere in the prototype stage, but you have to assess yourself correctly to make sure that TRL 5 has been completed.
Is It Deep Tech and Does It Fit the Programme?
Lastly, there is the question of deep tech: is it actually an innovation, and does it fit the programme? This is extremely subjective and depends on the exact case and the exact technology.
Software companies can be a good fit, hardware companies can be a good fit, and medtech can be a good fit. It depends on the individual technology and company. You cannot say that one industry gets funded and another does not. The question is whether the company is fundable, rather than whether the project or the technology is fundable on its own. It depends on the company, which combines all of these things.
Most Companies Should Not Apply
Based on experience, and on the official numbers, most companies should not apply. If you look at most businesses, say a cashew farm somewhere in Sri Lanka operated from the European Union, that clearly is not a good fit. There are many companies like that: retail stores, service businesses and many other types of business that are not directly eligible. The EIC does not particularly like pure business model innovations.
The EIC likes hard technology, which does not have to be hardware. It can also be software, but it has to be a technology that is recognised as something you had to develop yourself, rather than implementing a service, having a different business model or taking other people's technologies and combining them.
How to Check Whether You Are a Fit
If you still think you should apply, you need to figure out whether you are a good fit, and the best way to do that is to go through the list of companies that got funded. That list tells you exactly what types of companies are funded.
- If you are a software company, look at the software companies that got funded.
- Check out what they do, their rough scope and their online presence, and what evaluators probably saw in these businesses.
- If you are still unsure, reach out to someone who will take the time to tell you whether it makes sense or not.
Summary
- The EIC Accelerator is very selective, even though its messaging makes almost everyone feel like a fit.
- Never rely on a single funding opportunity, and do not apply because you urgently need money.
- The EIC wants companies that are talking to investors and have a long-term financing strategy.
- Grant-only applications are allowed, but a funding plan with private investors is still expected.
- Eligibility requires an EU or associated-country SME with a validated prototype at TRL 6.
- Fit depends on the company and its hard technology, not on the industry.
- Study the funded companies to judge whether you are a fit.
