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EIC Fund - Explainer Series 4 (Investor criteria)

Written by Demmis Necula | April 25, 2023

The EIC Fund is Europe's flagship blended funding programme, combining EC innovation grants with equity investments from private investors (typically VCs). The biggest programme of this kind in Europe with a substantial multi-annual investment budget. There is, however, a significant gap between its promise and current delivery.

This is our series of Explainers, aiming to clarify key aspects of this programme: The EIC Fund's Criteria for Private Investors. 

What is the Process of Signing a Deal with the EIC Fund?

Overview: The EIC Fund investment process consists of 9 steps. Steps 1-3 involve standard communications between the award recipient and the EIC Fund as well as due diligence and compliance checks. In steps 4-6, the European Investment Bank (EIB) prepares the investment recommendation for the investment committee and Board of Directors to review. Finally, in steps 7-9, the company receives a term sheet and the investment agreement is signed.

What are the Qualification Criteria for Investors?

Private co-investor/lead investor checklist:

  1. Must be a new, unaffiliated private investor. 
  2. The private investor(s) has the capacity to validate the market and technology prospects of the prospective investee company as well as the ability to conclude the investments with market compliant terms and conditions. 
  3. The private investor(s) must have full alignment of interest with the EIC Fund and shall not have other motives driving the investment decision. 
  4. The deployment of the innovation by the private investor(s) helps the companies' development, in order to attract further investments to scale-up and to allow for an effective exit strategy for the EIC Fund.
  5. The private investor(s) should add critical value to the company.
  6. The private investor(s) must have the knowledge, the expertise , the teams and the networks of contacts needed to help the beneficiaries reinforce their teams and business strategies and achieve a successfully commercialisation and scale-up in the specific verticals, in accordance with their high-growth potential and ambition. 
  7. Depending on the starting stage of the operation and its nature, the private investor(s) may include: 
    1. Business Angels.
    2. Venture Capital Funds.
    3. Impact Investment Funds.
    4. Family Offices.
    5. Venture Debt Funds.
    6. National Promotional Banks and Institutions (NPBIs).
    7. Corporate Venture Arms.
  8. The private investor(s) has the ability to match the EIC Fund on a basis of at least one-to-one. 


Special cases

The qualification criteria may vary case by case, and for each case, the qualification is subject to assessment by the EIC Fund. 

In the case of potential investments in companies that have set up or plan to set up financial holding vehicles outside of the territory of the EU Member States or Associated countries to Horizon Europe, the Fund will determine whether such structuring can be accepted taking into account their investment guidelines (which can be found here) with a view to ensure compliance with Article 155(2) and (3) of Regulation (EU, Euratom) 2018/1046 (Financial Regulation of the EU). 

Read more: https://landing.winnovart.com/eic-fund-explainer-series-4  

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