EIC Accelerator: Investment Guidelines by EIC Fund
Opting for blended finance under EIC Accelerator? European Innovation Council Investment Guidelines were released this month, and aim at throwing some light on the whole process led by EIC Fund: from the positive evaluation of the Jury Members at the face-to-face meetings to the investment implementation itself.
But, what is EIC Fund?
The EIC Fund is a venture capital fund -Alternative Investment Fund, AIF-, being the European Commission its shareholder, to date. Later, it is envisaged that European Investment Bank will take over this role under a mandate agreement.
Their main mission is to bridge the critical financing gap faced by innovative companies when bringing their technologies to the market -"innovation transfer to market"-, making direct equity and quasi-equity investments in start-ups and SMEs.
They also aim to crowd in other investors, for de-risking purposes.
"The EIC Accelerator aims at bridging this market failure, known as the “Valley of Death of European Innovation”".
And how does EIC Fund play this role? The EIC Fund is specifically tasked with:
To lead the overall due dilligence process.
EIC Fund analyze and asses the potential investment component and its subsequent implementation of the EIC blended finance awarded by the EC
To raise awareness and interest from other investors.
EIC Fund build a large network of capital providers and strategic partners suitable for co-investments and follow on funding. Not to forget that EIC Fund should act as a catalyst in the capital market aiming at multiplying the EIC Fund investment with a factor of 3 to 5.
To manage and exit from the investment.
EIC Fund lead complaince checks, company valuation and due dilligence process to succesfully implement the investment transaction throughout its lifecycle.
And what is the standard form of the investment component under EIC Accelerator?
€5 - €15 Mio
10% - 20%, max. 25%
7 - 10 years, max. 15
Equity + Quasi-equity
If you are interested in knowing more about the process details -including all the investment scenarios and the respective transactions' categorisation-. feel free to download the ready-to-use Flowchart of the Investment Guidelines for EIC Accelerator.