Library FAQ
Which sectors are ineligible for EIC Accelerator support?
Sectors excluded by the EU Financial Regulation including Article 136, restrictive measures under Article 215 TFEU, and sectors incompatible with the ethical and social basis of the Horizon Europe mission (summarised in the Horizon Europe Regulation including...
Can the Commission award follow-on investments?
Yes. The Commission may award follow-on investment on an ad hoc basis to operations initially awarded an investment component or grant-first support, subject to review by independent experts and advice of the EIC Board. Transfers of H2020 awards follow the Hor...
How does mentoring work under the EIC Fund?
With the company's consent, the EIC will connect the company to its network of mentors (who could also be potential investors) to provide business development advice. In some cases, such as under Bucket 1, mentoring may be mandatory as a condition of investmen...
How does the EIC Fund approach valuation for equity investments?
The EIC Fund will generally align its valuation to the market valuation set by private qualified investors co-investing alongside it. It may use common investor valuation methods such as multiples of earnings (times revenue), fair market value, book value, pri...
How does the EIC Fund monitor and follow up investments?
The EIC Fund monitors milestone funding, financing events (conversions, top-ups), write-downs, restructurings, exits, etc. Representative or observer roles on boards are performed by qualified EIC Fund representatives appointed for that purpose and included in...
How does the EIC Fund proceed with investments in case 1?
The EIC Fund performs due diligence and proceeds in principle with the awarded investment using a combination of quasi-equity and equity on its standard terms, includes support measures to address shortcomings, ensures a Board Member seat, and seeks external m...
How is intellectual property managed and how are EU interests protected?
EIC Accelerator operations are exempt from Horizon Europe IP obligations except where no investment component is awarded, no investment agreement is concluded, or the operation is terminated during the grant. Within national law the investee and co-investors a...
How is investment implementation carried out?
Implementation includes timely identification of the appropriate financing structure, negotiation of investment terms, assessing third-party financing availability, and closing final legal documents. The EIC Fund contracts with and directly finances investee c...
Is additional technology due diligence required?
Yes. Additional technology due diligence may be required on a case-by-case basis to complement the technology assessment performed prior to the EC award, including investor-angle analysis and possibly input from EIC Programme Managers or national innovation ag...
What are implementation networks?
Implementation networks refer to entities the EIC Fund may engage with for implementing investments, for example law firms.
What are the terms of the EIC Fund's first-tranche convertible loan?
The first tranche is generally the maximum of either 50% of the estimated EIC Fund investment or the unfunded cash needs over up to 18 months, provided as a convertible loan convertible at the next qualified round; maturity is max 18 months, interest 8% fixed...
What aspects does financial and commercial due diligence focus on?
Due diligence focuses on governance and management quality; capital structure and financial planning; business strategy; competition; market assessment; value creation; and legal form and jurisdictions.
What conditions apply to the EIC Fund's second tranche of investment?
The EIC Fund will in principle invest the remaining estimated amount in an equity round subject to private investors co-investing an amount fully matching the total EIC Fund investment (including the convertible loan). The Board may require co-investors be qua...
What could non-compliance lead to?
Non-compliance, including political or integrity issues creating high reputational risk, may lead the EIC Fund Board to recommend to the Commission to terminate or cancel support. Breach of obligations at any stage may lead to interruption, cessation or cancel...
What is Bucket 2 (co-investment opportunities)?
Bucket 2 includes cases where potential investors show immediate interest in co-investing into EIC-selected companies. The EIC Fund seeks that its investment is at least matched by other investors (covering at least 50% of the round), generally relying on due...
What is Bucket 3 (alternate investment opportunities)?
Bucket 3 includes cases where potential investors show immediate interest in providing the full investment into EIC candidate companies. The EIC Fund Board may still decide to co-invest to secure a blocking minority where EU interests cannot otherwise be prote...
What is the typical investment duration and exit strategy for the EIC Fund?
The EIC Fund invests patient capital with a long average perspective (7–10 years) and a general maximum of 15 years. The main objective is impact investment; exit routes are set case-by-case and may include IPOs, management buy-outs, secondary sales or liquida...
What protections and remedies exist in case of fraud or material breach?
Investment agreements contain protection clauses for material breach, fraud or non-compliance, potentially requiring full reimbursement or cash settlement of EIC support. For equity, remedial measures may include disposal of EIC's interest via secondary sale....
What types of investment instruments does the EIC Fund use?
Priority instruments are equity or quasi-equity, including common shares, preferred shares, convertible instruments (e.g., convertible loans), and other equity-type instruments, with terms standardized where possible and adjusted as needed for specifics.
When are compliance and KYC checks performed?
Compliance and KYC checks are performed prior to the initial investment and prior to possible follow-on investments, and are extended to shareholders and their ultimate beneficial owners. Checks relate to KYC, AML, anti-terrorism financing, tax-avoidance, non-...
Will the EIC Fund take a board seat in investee companies?
Yes. When operating as a major investor the EIC Fund will ensure a Board Member seat in target companies and seek external mentoring.
Are there special provisions for Israeli entities?
Yes. Agreements with Israeli EIC Fund Final Recipients must include a clause committing compliance with the EU Guidelines on eligibility of Israeli entities (Commission Notice 2013/C 205/05), reflecting restrictions related to territories occupied since June 1...
Can the Compartment make secondary share purchases or exercise rights to buy exiting shareholders' shares?
Yes. The EIC Fund can make secondary share purchases on a case-by-case basis and will strive to have a right of first refusal to purchase exiting shareholders' shares on a pro-rata basis, including to prevent transfers to non-eligible countries for economic se...
How are companies selected for potential investment by the Compartment?
Companies apply to the EIC Accelerator via public calls; EISMEA collects and evaluates proposals; the EU Commission selects actions and may indicate an indicative EIC blended finance amount and maximum investment amount in its award decision.