What the EIC Fund updated and why it matters

On 30 April 2024 the European Innovation Council and the Executive Agency that manages it published a new version of the EIC Fund investment guidelines. The document is framed as practical guidance for applicants to the EIC Accelerator scheme selected under Horizon Europe as well as for companies that have already been chosen for support and for potential co-investors. The update sets out how the EIC Fund will decide to invest and divest and clarifies a number of technical points that matter for governance underwriting and follow-on funding.

Headline changes in the guidelines

Compared with the prior version the guidelines add or revise several elements. The most clearly signalled changes are an updated definition of what the EIC Fund considers a qualified investor an expanded description of possible investment scenarios and new contractual clauses addressing follow-on investments and exits. The guidelines also restate that the Fund's investments are intended to accelerate scale up of high potential startups and SMEs and to catalyse additional private sector investors.

Where the EIC Fund fits in the EIC Accelerator

The EIC Accelerator uses a blended finance model. That means successful applicants may receive a grant component to de-risk technology development and an investment component to support scaling. The guideline restates that grants can be up to €2.5 million and that investments through the EIC Fund are normally between €0.5 million and €15 million in equity or quasi equity although the Fund can exceed the upper band in specific circumstances. The new document is explicitly applicable to companies selected under Horizon Europe.

Performance figures cited and how to read them

The EIC Fund states that since its creation in June 2020 it has approved roughly 350 investments across Europe with a total approved investment amount of about €2 billion. In 2023 the Fund says it supported over 100 investment rounds and that those rounds attracted co-investments from 280 other investors worth €1.2 billion. The Fund uses those figures to claim it is leveraging over 3.5 euro of additional investment for each euro of direct Fund investment.

What this means for startups and co-investors

The guidelines are primarily a transparency measure. For founders they provide clearer signals about the types of deal terms and post investment behaviours they may encounter when interacting with the EIC Fund. For co investors the updated qualified investor definition and scenario descriptions help set expectations for syndication and governance. Nevertheless the guidelines are not a substitute for negotiation and due diligence and do not remove typical frictions that arise in cross border scaling such as valuation disagreements limited follow on capital or differing exit horizons between public backers and private investors.

Policy and ecosystem context

The EIC Fund sits within a wider set of EU instruments designed to strengthen deep tech and scale up ecosystems across member states. The blended finance approach aligns with broader EU policy goals to increase private investment into strategic technologies and to improve commercialisation of research. The EIC Fund is also part of a trend where public actors take minority equity stakes to crowd in private capital rather than replacing it.

That strategy is not without debates. Critics point out that public equity investments require rigorous governance to avoid crowding out independent private investment or tilting markets toward political priorities. Proponents argue that early stage deep tech is underfunded and that public vehicles can correct market failures. The new guidelines are a tactical step to make the Fund's approach more legible to both sides of the discussion.

Practical next steps for interested parties

Applicants and potential co-investors should review the updated investment guidelines to understand the revised definitions and clauses. Companies preparing applications should assess how blended finance may affect cap table dynamics and future fundraising. Co investors and ecosystem intermediaries should check whether they meet the qualified investor criteria set out in the update and consider how their investment processes align with the Fund's described scenarios.

Key facts at a glance

Final assessment

The updated EIC Fund investment guidelines improve clarity on several technical points that matter to founders co-investors and advisers. They make the Fund's intentions more transparent particularly on follow-on investments exit mechanics and who counts as a qualified investor. That matters for market signalling. At the same time headline metrics such as leverage ratios should be read with caution and tested against longer term outcomes. The real test of the update will be how it affects deal execution negotiation dynamics and the ability of supported companies to secure sustained private capital and to achieve follow-on growth and exits.