Library FAQ
What is Bucket 3 and what options exist when third parties offer full funding?
Bucket 3 includes cases where investors offer to provide the full investment; the External AIFM may nevertheless co-invest (e.g., to secure a blocking minority), reserve initial authorised investment as a top-up, and negotiate terms to ensure founder incentive...
What remedies or consequences arise from non-compliance or ineligibility discovered during due diligence?
Non-compliance or ineligibility (including fraud, misrepresentation, sanctions issues) can lead to termination or cancellation of EIC Accelerator support, termination of investment contracts and Compartment exit, reimbursement/cash settlement obligations, and...
When is additional technology due diligence required?
Additional technology due diligence may be required case-by-case by the Investment Committee to supplement the initial assessment with a more in-depth, investor-angle review or to investigate concerns raised about misrepresentation or manifest error; relevant...
Which types of investors may participate depending on the operation's stage?
Investors may include Business Angels, Venture Capital funds, Impact investment funds, Family offices, Venture debt funds, National Promotional Banks and Institutions (NPBIs) and corporate venture arms.
Who are "Qualified Investors" and why are they important?
Qualified Investors (e.g., business angels, VCs, impact funds, family offices, venture debt funds, NPBIs, corporate venture arms) not only provide funding but add knowledge, expertise, teams and networks to help companies strengthen management, business strate...
Who conducts due diligence and KYC checks?
Due diligence and KYC compliance checks are led by the External AIFM and the Adviser, with the External AIFM performing compliance checks prior to initial investment and subsequent tranches.
Are beneficiaries encouraged to seek co-investors themselves?
Yes. Beneficiaries are entitled and encouraged to seek co-investors in parallel with the EIC Fund's efforts.
Can a material breach of the grant contract affect the investment component?
Yes. A material breach of the EIC Accelerator contract related to the grant component prevents the EIC Fund from further investing and may lead to early exit, and vice-versa.
Does the EIC Fund seek co-investment when providing direct equity?
Yes. It will systematically seek co-investment and syndication on at least a matching 1:1 basis and seeks an overall leverage effect of 1:3 throughout the investment horizon.
How are milestones defined under the EIC Accelerator?
Milestones are meaningful achievements in the company's innovative project that reflect maturity stages and TRLs achieved, including leveraged co-investment; support continues as long as relevant milestones are met, unless EU market deployment cannot realistic...
How are tranche timings and milestone conditions managed?
They are negotiated with the company, agreed and managed by the EIC Fund under the operational coordination of EISMEA while the grant component is in force; tranche disbursements are linked to predefined milestones.
How does the EIC Fund handle investments made in tranches?
The Fund will take a position on the entire amount considered for funding (which may differ from the EC award), decide the overall package, and may recommend the EC revise or reject the initially awarded investment. Timing and tranche conditions are negotiated...
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.