THE BEST SOURCES OF FINANCING FOR INNOVATIVE IDEAS
Every stage of product’s development needs your time, knowledge and money. Especially money are important. Wide scope of programmes, gives an opportunity to find external financing for start-up companies.
Setting up own business, especially when it is focused on implementation of new, innovative ideas is a great opportunity. At the same time, building business based on R&D activities involves some kind of risk and requires a significant amount money, which can be real challenge, especially for start-ups. There are different possibilities to secure financing for research and development of new products, services or processes and one of them are grants from EU funds available in Poland (with flagship support – Fast Track) or at the European level (Horizon 2020 – SME Instrument)
Why Fast Track?
- Grants for R&D projects at various stages of development (industrial research, development works and pre-implementation activities) – you can obtain money for the whole process of product’s creation
- Support up to 80% of eligible costs of industrial research, 60% of development works and 90% of pre-implementation activities
- In case of R&D failure you don’t have to give money back – it’s key advantage in risky and highly innovative projects
- Maximum grant value – EUR 20 m for a single project
- Project can be run by single enterprise or consortium – you can find a partner which empowers R&D ability
- High budget – in 2019 alone, PLN 2 bn is waiting for enterprises
- At least 2 calls for proposals a year
- If you run the project individually (without consortium) the whole IP is yours
- You can obtain financing without giving away shares of your company
Why SME Instrument?
- Enterprises whose product /process/service is on the advanced stages of development (TRL 6 minimum) can obtain financing for further development and preparation of their solution for a market launch
- Activities could include preparation of feasibility study (Phase I – lump sum EUR 50 000, but the scheme is to be closed – the final deadline for applications is 5th September 2019!) and trials, prototyping, validation, demonstration and testing in real-world conditions and market replication (Phase II)
- In Phase II there are 2 options: only grant (EUR 0,5 – 2,5 m) or blended finance (grant and optional investment in equity up to EUR 15 m in addition to the grant
- There is also non-financial support including coaching, training, links to investors, partnering and networking with other EIC beneficiaries
- SME Instrument grants not only gives cash but also ensure wide range of additional support which can actually put a company on the map alongside established EU-market players
Two different programmes, two ways of development … Which source of support to choose? That depends on project maturity and business potential. Both programmes are generously funded, but competition is keen. If your solution is at an earlier stage of development and you still need to run a number of R&D works then You should start with Fast Track. But if the product/service is at least at 6 TRL and it will be innovation in European scale, then there is all to play for and the SME Instrument might be just the ticket!