Library FAQ
How will the EIC Fund approach investments in Bucket 1 cases?
It may invest using quasi-equity or a combination of quasi-equity and equity, often act as a major investor with a board seat, provide external mentoring and support measures, and may structure investments in multiple tranches to address shortcomings.
What are the conditions for the second tranche in Bucket 1?
The second tranche would generally be the remaining estimated investment in an equity round, subject to private investors co-investing an amount fully matching the total EIC Fund investment (including the convertible loan). The Fund may require co-investors to...
What are the typical terms of the EIC Fund's first tranche convertible loan in Bucket 1?
First tranche would be the maximum of either 50% of the estimated EIC Fund investment or the company's unfunded cash needs for generally up to 18 months; such convertible loans generally have an 18-month maturity, 8% fixed interest (accruing and capitalised),...
What components can EIC Accelerator support include?
A grant component for TRL 5–8 activities (up to 70% of those activities' costs) and an investment component which may be convertible instruments, quasi-equity, direct equity, or combinations thereof.
What due diligence and categorisation process does the EIC Fund perform?
After initial due diligence including KYC (led by the EIC Fund) and market consultation (led by the Investment Advisor), transactions are categorised into four buckets; the classification can change as due diligence or co-investment interest evolves.
What examples of negative issues can lead to a Bucket 0 classification?
Examples include fraud or misrepresentation; refusal/failure to provide requested information; material adverse changes (e.g., major management or control changes, serious litigation, loss of key partners); cap table misalignment; undisclosed investors/UBOs ca...
What is Bucket 0 in the EIC Fund transaction categorisation?
Cases where initial assessment or due diligence reveals substantial negative issues preventing any investment (a 'No Go'). These issues may lead the Fund to recommend rejection of the investment and possible contract termination.
What is Bucket 1 in the transaction categorisation?
Companies that are not investor-ready yet due to remaining very high risk despite EIC support — e.g., very early technology, long time-to-market, too small a market, or lack of readiness to absorb equity (team or cap table issues).
What is the typical initial investment size from the EIC Fund?
Between EUR 0.5 million and EUR 15.0 million per company, without prejudice to Work Programme provisions that may allow higher amounts in specific cases.
What ownership stakes does the EIC Fund target when investing?
It targets minority ownership stakes generally between 10% and 20%, and up to a blocking minority in cases identified by the EC as essential for the EU; it will avoid majority stakes in principle.
What TRL range does the EIC Accelerator support cover?
Starting at the earliest at TRL 5 and up to TRL 9.
What types of co-investors may participate alongside the EIC Fund?
Business Angels, Venture Capital funds, Impact investment funds, Family offices, Venture debt funds, National Promotional Banks and Institutions (NPBIs), or corporate venture arms.
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.