Library FAQ
How are investments structured and monitored when made in tranches?
The External AIFM takes a position on the entire contemplated funding amount; timing and conditions for tranche investments (linked to predefined milestones reflecting TRLs and maturity) are negotiated with the recipient, agreed by the External AIFM, and manag...
How does the Compartment approach co-investment?
The External AIFM will connect investees to the EIC investor ecosystem to leverage co-investment. Beneficiaries are encouraged to seek co-investors. If agreed, due diligence and negotiations may be performed jointly but remain under control of the External AIF...
To which compartment do these Investment Guidelines apply?
They apply to the EIC Fund Horizon Europe compartment (the Compartment).
What are the typical investment size and equity stake targets?
Investment per company generally ranges between EUR 500,000 and EUR 15,000,000. Targeted ownership stakes are usually minority positions aiming between 10% and 20%, though blocking or majority stakes may be acquired when needed to protect European interests.
What exclusions apply to investments by the Compartment?
The Compartment shall not invest in economic sectors incompatible with the ethical and social basis of Horizon Europe, and must comply with exclusion criteria in the EIC Fund Memorandum, EU Financial Regulation (including Article 136), restrictive measures und...
What is the geographical eligibility for companies?
Companies must be established and operating in EU Member States or Countries Associated to Horizon Europe Pillar III. The External AIFM may invest in a holding or parent established in those territories if justified and meeting eligibility criteria.
What is the Investment Objective of the Compartment?
To invest in EIC Fund Final Recipients that develop or deploy breakthrough technologies and disruptive, market-creating innovations, and to fill a financing gap in European technology transfer by supporting commercialisation and scale-up.
What is the purpose of the EIC Fund Investment Guidelines 2023?
They provide information to potential beneficiaries and co-investors on the strategy and conditions under which the EIC Fund will make investment and divestment decisions and update definitions and clauses (e.g. qualified investor, follow-on investments, exits...
What is the typical investment process once a proposal is selected?
Selected proposals are channelled to the External AIFM for initial assessment, categorised into scenarios (Buckets), undergo financial due diligence and KYC, receive structuring proposals and term discussions by the Adviser, are approved or rejected by the Ext...
What measures can the Compartment take to protect European interests in strategic areas?
It can take investment-related measures such as secondary share purchases, acquiring a blocking stake (including blocking minority), investing even if other investors show immediate interest, disposing interests via secondary sale, making Follow-on investments...
What roles do the Adviser and EISMEA play in the investment process?
The Adviser undertakes financial due diligence (unless done by co-investors), discusses financing terms, guides legal work, and assumes an observer function in portfolio companies; EISMEA evaluates Accelerator proposals, negotiates and signs the grant contract...
What target company stages does the Compartment focus on?
Pre-seed, seed, early-stage SMEs, and small mid-caps, typically highly innovative for-profit entities with strong IP components.
What types of financial instruments can the Compartment use to invest?
The Compartment may invest in equity or equity-related securities, including preferred equity, convertible debt, options, warrants, quasi-equity instruments (e.g. participation rights, SAFE), and direct equity.
What types of innovation does the Compartment support?
Deep-tech (technology based on cutting-edge scientific advances), radical thinking, and social innovation, and it may focus on capital-intensive strategic technologies where appropriate.
Which entity makes all investment and divestment decisions for the Compartment?
The External AIFM makes all investment and divestment decisions for the account of the Compartment.
Are there policy priority areas the EIC Accelerator focuses on?
Yes. While open to all high‑risk innovations, part of support may focus on capital‑intensive strategic technologies in policy priority areas such as Health, Green Deal (clean energy, climate action, future mobility), Digital Transformation, advanced engineerin...
Can the EC provide follow‑on investment after the initial award?
Yes. The European Commission may award follow‑on investment on an ad hoc basis, outside calls, subject to budgetary availability, independent expert review and advice of the EIC Board, for operations initially awarded an investment component or a “grant first”...
How are investments structured and disbursed?
Investments may be disbursed in tranches tied to meaningful milestones reflecting project maturity and TRL progress. The EIC Fund Board decides on the total investment package and may recommend revising or rejecting initially awarded investments; EISMEA coordi...
How do companies apply and receive EIC support?
Companies apply through public EC calls. EISMEA collects and evaluates proposals; the EC selects actions and awards indicative blended finance. EISMEA negotiates the grant contract and forwards the indicative investment component to the EIC Fund for due dilige...
How is the EIC Fund governed?
The EIC Fund is governed by a Board of Directors (five members appointed by the European Commission) which oversees investment strategy and decides on operations, advised by an Investment Committee of eight members who propose investment structures and terms.
How is the investment agreement linked to the grant contract?
Once negotiated, the investment agreement enters into force upon an amendment to the Accelerator grant contract that reflects the agreed investment amount, instalments, milestones/deliverables and any agreed changes to the action; some investment terms are kep...
What are the consequences of a material breach of the Accelerator contract?
A material breach of the grant component of the Accelerator contract prevents the EIC Fund from further investing in the company and may lead to early exit; the converse also applies.
What founder‑friendly terms does the EIC Fund aim to preserve?
The EIC Fund aims for founder‑friendly terms to preserve founder value and motivation—for example a stock option pool of at least 10% for founders and key employees—while also considering investor‑friendly terms to attract private capital.
What funding components does the EIC Accelerator provide?
EIC Accelerator support consists of EIC blended finance: a mix of grant and investment (in particular equity or quasi‑equity). For a small mid‑cap the support may consist only of investment on a co‑investment basis.