Library FAQ
How is intellectual property (IP) handled for blended finance projects?
Projects benefiting from EU equity (buckets 1 to 3) are exempted from Horizon 2020 IP obligations (except on early termination); within national law investees and co-investors are given maximum autonomy on IP, but where EU strategic interests arise and a block...
Under what circumstances can an application be rejected or investment terminated?
Applications can be dismissed or investments terminated if fraud, misrepresentation, exclusion, ineligibility or non-compliance (including tax, political or integrity issues) are established; grant agreements may be terminated and the EIC Fund may exit and see...
What are the EIC Fund's co-investment scenarios (buckets) in brief?
Bucket 1: market shows no interest—EIC Fund may invest alone after due diligence; Bucket 2: no immediate but potential interest—similar, with possible future co-investor involvement; Bucket 3: immediate but partial interest—EIC Fund invests relying on co-inves...
What are the typical EIC Fund investment sizes and grant amounts?
EIC Fund equity investments will range between EUR 0.5 million and EUR 15 million per company, blended with a grant component between EUR 0.5 million and EUR 2.5 million (EUR 3.5 million for the Health sector) provided by the EC.
What aspects does the EIC Fund's due diligence focus on?
Due diligence focuses on governance and management quality, capital structure and financial planning, business strategy, competition, market assessment, alternative financing sources, value creation, legal form and jurisdictions.
What company development stages does the EIC Fund target?
The EIC Fund targets Pre-Seed, Seed and Early-stage SMEs; growth-stage companies are not within the focus of the pilot phase.
What equity stakes does the EIC Fund typically target?
The EIC Fund will generally target minority ownership stakes from 10% to 25%, and up to a blocking minority for cases identified by the EC as of strategic interest; it will avoid majority stakes unless due to external unforeseen circumstances.
What geographic scope applies to eligible companies?
Companies must be established and operating in EU Member States or countries associated to Horizon 2020.
What is the EIC Fund and its main objective?
The EIC Fund is an initiative of the European Commission with support from the EIB Group that provides patient capital (equity or quasi-equity blended with grants) to bridge the financing gap between research grants and commercialization of market-creating inn...
What is the investment decision process flow from application to monitoring?
Selected proposals are channeled to the EIC Fund; the EIB (Investment Advisor) undertakes due diligence and negotiates draft terms; the Investment Committee examines due diligence and structuring proposals and recommends to the EIC Board, which takes the final...
What is the maximum total funding a recipient company can receive under these guidelines?
The EC will allocate a maximum total funding (grants and equity) of EUR 17.5 million to recipient companies to bring their innovations to market.
What is the typical investment duration and exit approach for the EIC Fund?
The EIC Fund invests patient capital with an average perspective on returns of 7–10 years and a maximum of 15 years; exit strategies are set case-by-case and may include IPOs, management buy-outs, secondary sales or liquidations.
What types of equity-type financial instruments can the EIC Fund use?
The EIC Fund may use common shares, preferred shares, convertible instruments (e.g. convertible loans) and other equity-type instruments appropriate to achieve its objectives.
What types of financing does the EIC Fund provide?
The EIC Fund provides equity or quasi-equity investments blended with a grant component; the grant is managed by the EC and the equity component is operated by the EIC Fund with EIB Group support.
What valuation methods might be used for investee companies?
Commonly referenced methods include multiples of earnings (times revenue), fair market value comparisons, book value (market value of assets minus liabilities), price of recent investment, discounted cash flow, and other asset-based methods such as liquidation...
What was the initial pilot budget of the EIC Fund?
In its pilot phase (until 2020) the EIC Fund had an initial budget of EUR 100 million.
Which entities are eligible for EIC Fund investment?
Eligible applicants are for-profit SMEs, including start-ups and early-stage companies organized as single economic entities; consortia, universities and non-SMEs are not eligible.
Which sectors are policy priorities for the pilot?
The pilot focuses on capital-intensive policy-priority sectors including clean energy, advanced engineering, life sciences, digital, space, climate action, future mobility and social innovation.
Who manages the grant and who manages the equity component of the EIC Accelerator pilot?
The grant component is managed by the European Commission; the equity component is operated by the EIC Fund and advised by the EIB Group, under the EIC governing bodies.