Analisys of proposed changes in the H2020 SME instrument within Horizon Europe.

1. THE 7 DIFFERENCE BETWEEN THE
HORIZONEUROPE EIC ACCELERATOR
AND THE H2020 SME INSTRUMENT
PhD. Luis J. Guerra, @LGuerra_CDTI
División de Programas Europeos de @CDTIoficial

2. 2 (13/09/2018)
“I want an evolution not a revolution.”
(C.Moedas to the EP 01/2018)
Rationale Instrument Process
SME instrument H2020
EIC Accelerator in HorizonEurope

3. 3 (13/09/2018)
H2020 SME instrument in 4 years…
Grant in phases
(50k€-0,5-2,5M€ 70%)
Coaching
SME
EASME
Competitive 4
cut-off/year
Ph2 interview
Mainly
alone
1/3 of 20%
Bottom-up
6-8 weeks
T2I
Business acceleration services
The SMEI is not an R&D programme. It is an accelerator for market introduction of
promising technological /or non-technological innovations.
EU label branding.
More and quicker
next VC round.
Innovations reach
the market.
https://ec.europa.eu/easme/en/news/pre
senting-europes-innovation-kitchen-sme-
instrument-report-2018

4. 4 (13/09/2018)
Comercial Readiness Level
Ph1
Ph2
(*)
HE
EIC
Cross the valley of death vs. scale as unicorn
HE Proposal, SP A.1 III.1.1.2
Bridging the financing gap
between late stages of
innovation activities and
market take-up, to:
• deploy breakthrough
market-creating
innovation and
• scale up companies
where the market does
not provide viable
financing.

5. 5 (13/09/2018)
Cross the valley of death vs. scale as unicorn
HE Proposal, SP A.1 III.1.1.2
Bridging the financing gap
between late stages of
innovation activities and
market take-up, to:
• deploy breakthrough
market-creating
innovation and
• scale up companies
where the market does
not provide viable
financing.

6. 6 (13/09/2018)
An instrument only for SME vs an
instrument for SME and midcaps…
HE Proposal Reg. Art 43.1.
[…] The beneficiary of the EIC Accelerator
shall be a legal entity qualifying as a start-
up, an SME or as a mid-cap, established in a
Member State or associated country. The
proposal may be submitted by the
beneficiary, or by one or more natural
persons or legal entities intending to
establish or support that beneficiary. […]
HE Proposal SP A1 1.1.2
Proposals may also be submitted by
investors, including public innovation
agencies, but the support will be awarded
to the company.

7. 7 (13/09/2018)
From a grant scheme to a blended
financial instrument.
HE Proposal Reg. Art2.24
'Blending operation' means actions supported by the EU budget
combining non-repayable forms of support and/or financial instruments
from the EU budget with repayable forms of support.
The Accelerator will provide support in the form of EIC blended finance, a
mix of:
• Grant OR reimbursable advance, to cover innovation activities;
• Support for investment in equity or other repayable forms, so as to
bridge innovation activities with effective market deployment, including
scale-up.

8. 8 (13/09/2018)
A phased support vs a long-term support
Ultrahaptics, SME instrument beneficiary (http://www.ultrahaptics.com)
HE Proposal, SP A.1 III.1.1.2
The support of the EIC accelerator will be awarded through a single process
and with a single decision, providing the supported innovator with a single
global commitment to financial resources covering the various stages of
innovation down to market deployment including pre-mass
commercialization.

9. 9 (13/09/2018)
From common conditions ex ante to
tailored conditions in the support ex post.
Article 43.7 HE proposal
Independent experts shall propose a
corresponding EIC blended finance,
based on the risk incurred and the
resources and time necessary to
bring and deploy the innovation to
the market.
HE Proposal SP A1 1.1.2
The combination and volume of
financing will be adapted to the
needs of the firm, its size and stage,
the nature of the technology or
innovation and the length of the
innovation cycle.

10. 10 (13/09/2018)
From a well-known and transparent
process for all to shortcuts from some.
Article 43.5 HE proposal
The Commission may directly submit for
evaluation under the last evaluation
criterion (the level of risk of the action and
the need for Union Support) a proposal that:
• Stem from any other action funded by
Horizon 2020 or this Programme, or from
a national programme similar to the EIC's
Pathfinder and acknowledged as such by
the Commission;
• is based on a previous project review
assessing the excellence and the impact
of the proposal and subject to conditions
and processes further detailed in the WP.

11. 11 (13/09/2018)
From many short evaluations to few
operation with due diligence processes
HE Proposal SP A1 1.1.2
The EIC SPV will perform due diligence, and negotiate technical terms of each
investment […]. The EIC SPV will also define and implement an exit strategy
for equity participation, which may include proposing to implementing
partners financing under InvestEU, where appropriate and for operations
whose risks have been sufficiently lowered.

12. 12 (13/09/2018)
“I want an evolution not a revolution.”
(C.Moedas to the EP 01/2018)
Rationale Instrument Process
SME instrument H2020
EIC Accelerator in HorizonEurope

13. 13 (13/09/2018)
“I want an evolution not a revolution.”
(C.Moedas to the EP 01/2018)
Rationale Instrument Process
SME instrument H2020 (grants + soft link to equity)
EIC Accelerator in HorizonEurope
(equity + small grants for some)
Unicorns vs
innovations
SME vs SME,
midcaps and
others
Grant vs financial
instrument
Phased vs long-term
single decision ex ante
Common conditions vs
tailor offer
Common Evaluation
vs possible shortcuts
Many quick
evaluations vs few
due diligence
operations

14. “The European Council invites the
Commission to launch a new pilot initiative
on breakthrough innovation within the
remaining period of Horizon 2020. A
European Innovation Council will be set up
under the next Multiannual Financial
Framework to identify and scale up
breakthrough and disruptive innovation. “
European Council Conclusions, 28 June 2018