EIC SME INSTRUMENT 2018-2020: Ready to shine ?
The SME Instrument is now part of the European Innovation Council (EIC) pilot with lots of new opportunities and a brand new evaluation system.
Is the SME Instrument really for you?
Is SMEI for you? First things first, please, check Work Programme 2018-2020 to assess if your project is in line with SMEI goals. Everyone will tell you that you need "a breakthrough innovation with the potential to create entirely new markets or revolutionise existing ones, a clear ambition to grow at international level, a demonstrated knowledge of your target market and a convincing business plan".
Again, is SMEI for you? Even if you match this description, it is paramount to check if the constraints that SME Instrument imposes in terms of timing are 100% compatible with your company strategic goals.
Will SMEI impose delays in the commercialisation of your new product/service? At the end of the day if any public or private funding compromises your time-to-market this could be really bad business. Do not forget about other interesting actions (e.g. CleanSky, Eurostars, Fast Track to Innovation) that could be more in sync with your company strategy (ask expert consultants or just give a chance to the EIC wizard to check which action would better suit your project).
If in doubt, ask for help! Do not hesitate to seek advice from National Contact Points, specialised consulting firms, or incubators. When you do this, be professional and prepare a good pitch of your business idea that shows your full ambition and the impact this project will have on your company in the long-term. We are usually told that SMEI finances projects but I feel that the real goal is identifying and financing those projects that can make the companies behind them turn into future market leaders.
Write to convince evaluators to invest in your business.
A perfect proposal? I will not entertain myself here describing winning factors and what to talk about at each section of the official template: start by checking the official annotated proposal (they have made a really good work). I would also like to recommend the great information and tools that can be found at Access 4 SMEs. Apart from this valuable resources, you can find on the web zillions of tips from private and public organisations that can help you prepare a "perfect" proposal. However, success in a writing document is always built upon experience and iterations so if you lack the experience, try and find at your company the right team or, if necessary, try and find the right experienced consultants to work with (a personal advice here: if you finally rely on external help, always choose those that make you work, those that challenge your business idea the most, and runaway from anyone telling you this is going to be a piece of cake).
Who will you write for? What I would like to stress now is that the recipients of this document are two:
Your company (and yourself). At the end of the day, if the document is not really useful for you in your day to day and accurately describes your business idea and your company strategy, the document is not worth the effort.
SMEI evaluators. As we want them to score us the higher the better, please, always consider if your document really facilitates the scoring of your proposal or, at the very least, the readability of the document. In this regard, please, consider that they have to evaluate around 3.3 EIC Accelerator proposals per working day. This leaves them just 144 minutes to understand and score each proposal!. Indeed, MOST IMPORTANT success factor is trying and making straightforward understanding your business idea: go straight to the point, be realistic, show them facts, clear metrics-based goals, clear rationales. At the end of the day they cannot score high anything they cannot read, anything they cannot understand and, most importantly, anything that is not on the document (something obvious for us is not necessarily obvious for others).
Evaluation. Four remote evaluators (one with a finance profile, one with a technical profile, and the rest with a business profile) will look at different aspects of your proposal:
Technology (EXCELLENCE section, which counts for 25% of the scoring until 2019-June, 1/3rd of the scoring from 2019-October on),
Business (IMPACT section, which counts for 50% of the scoring until 2019-June, 1/3rd of the scoring from 2019-October on) and
Execution capability (IMPLEMENTATION section, which counts for 25% of the scoring until 2019-June, 1/3rd of the scoring from 2019-October on).
Until 2019-June, Impact section ruled, so back then, when in doubt, business aspects of the proposal were king. However, since 2019-October, this is no longer so, as all sections score the same. Moreover, in the EIC Accelerator Pilot it will be critical ALSO that the technology be really disruptive and game-changing, and that you clearly show why your project is currently non-bankable (see this other post) and that you have make your homework valuing your company (pre-money and post-money), especially if you ask for equity!
No topics? during the preparation of your proposal, you are requested to select associated keywords from a predefined list. It is paramount selecting the highest number of relevant keywords and this is a strategic choice as it will serve to select both the evaluators of the written proposal and the composition of the panel at Brussels, so think carefully who do you want to evaluate your proposal (e.g. in the health sector the subjective opinion of a hospital manager might be totally different from the opinion of a surgeon).
Prepare brilliant documents that help you shine at the pitch.
A brilliant proposal only will get you a ticket to pitch your business idea in Brussels where up to 3 company members (only staff legally employed and shareholders can attend the interviews, preferably the CEO and senior staff) will face an interview (in English) during 30 minutes. Before applying also make sure that you are available to travel to Brussels on the dates corresponding to the cut-off date of your application.
Make sure that your 10 minute presentation is perfect and that you AND YOUR TEAM are prepared to go into the details of your application during the 20 minutes of questions and answers (I have seen more than one failing attempt where the panel complained about just one of the members of the panel pitched the proposal and answered all questions).
You can usually hear that if you are invited to Brussels you have 50% chances of achieving the funds. Do not forget this is just a statistical truth and that the only way to succeed is preparation. Not only you have to shine at the pitch, you have to undoubtedly show the full commitment of your company, you have to show passion, you have to show that you really dominate your business, you have to show them, for sure, that your company will be a relevant key player in your targeted markets and that you have got what it takes. As clearly stated in the annotated template, your commercialisation strategy and your team preparation and execution capability will be scrutinised.
However, the pitch at Brussels is not your "typical" pitch (is ANY pitch "typical"?). A winning pitch must always be customised to fit the goals of the evaluation panel. In the case of SME Instrument, do not forget that the panel composition is diverse, but all of them have been selected considering the keywords you did select when the proposal was submited. Usually, the panel includes:
EU topic experts. Possibly fully aware of SMEI rules of the game (e.g. importance of the European dimension).
At least one of the evaluators of the written proposal. They will be fully aware of SMEI rules of the game.
Expert finance investors. They will possibly focus on business aspects, and not always be fully aware of all SMEI rules of the game.
Most likely the panel will be dominated by investors, possibly coming from Venture Capital firms or Business Angel Networks, so focus on the market side of your business in your answers and on your execution capability, backed by a well-balanced team. However, always try and give answers that satisfy all other evaluators profiles in the panel. Start by investing a few minutes learning about them and adjusting your pitch to the panel.
Finally, I would like to remind you, that you are lucky if you compare with other companies challenging a "typical" investors panel. At least you count with a key advantage: you already know that your document has been exceptionally well scored (possibly around 14 out of 15 points) and the panel knows about it. Indeed, the written document evaluators in the panel, possibly have transmitted their opinion on the main strengths and main weaknesses of your proposal to the rest of the panel. Make a tough analysis of your proposal, identify your weaknesses and be prepared for hard questions (the more you practice your pitch, the better). Let your written Phase-2 proposal be your anchor, but do not keep there, as the real winning factor will be showing that you really are in control, that you have what it takes to execute this business idea and that your company has all key ingredients to succeed once Phase-2 is finished and real business starts. If androids dream of electric sheeps, guess who dreams of SMEI beneficiaries going IPO a few years after their Phase-2.
Success always relies on preparation. The SME Instrument path can be very long with different written documents (Phase-1 proposal, Feasibility Study, Phase-2 proposal, Pitch slides) and a final presentation. I would like to emphasise the high importance of:
Consistency. Try and keep consistency along all documents presented, let them really capture your business and keep them alive: use them on any other business presentation so you can internalise all arguments there. Some companies try and do this process in the very last week and many times fail at the pitch because in their day to day they use different approaches, different rationales, different scopes. Train your pitch as soon as possible. Since the very beginning when you start writing your Phase-1 and use it in your day to day actions: let it be a live document and let it evolve.
Keep it simple. Pitch will only last for 10 minutes: focus on the conclusions and be crystal clear on your messages: no more than 3 key ideas for slide and clear and understandable graphics and tables.
Think big. SME Instrument funds projects, but the real goal is identifying and supporting future market leaders LIKE YOU!
Some links worth checking
Finally, consider directly getting in touch with them via Twitter @H2020SME
I have tried to differentiate my personal opinions from official information available at the EC site. Please, do warn me if this is not clear to improve this document.
I aim at trying and keeping this article up-to-date, hopefully improving thanks to readers' contributions
This post was first published as an article on my LinkedIn account