Andriotto Financial Services

The Investment Guidelines have been updated to provide more clarity to applicants and to reflect recent changes in the management of the EIC Fund and will remain in place until the end of 2022.

The general article here:

PDF available HERE

Updated: 1st March 2022

Check out our previous article about the “types of innovation” here:

Revised EIC: Investment Guidelines (2022) 1. TYPE OF INNOVATION

Check out our previous article about the “charateristichs of investments” here:

Revised EIC: Investment Guidelines (2022) 2. CHARACTERISTICS OF INVESTMENT

In the next articles, we would like to introduce some of the main points discussed in the document that might be of interest for any project that needs investors.


Insight on on the so-called:



There are several financing methods that the European Commission refers to, among those, there are the so-called “buckets.” It’s basically a way to determine how a project should be financed. 

 As reported in the document, 

If the company and the EIC Fund consent to the proposed co-investment opportunity, financial and commercial due diligence and negotiations may then be performed jointly and in agreement with the potential coinvestor(s), however under control of the Fund to ensure sufficient due diligence and implementation of required conditions to be included in the investment documentation. 

Following an initial assessment implying some level of due diligence, including KYC compliance checks (led by the EIC Fund), and market consultation (led by the Investment Advisor), a transactions’ categorization will be done into the 4 “buckets” presented below. This classification will not be static, as cases may be moved from one bucket to the other as the due diligence process evolves, based on its findings, or on the initiation of co-investment interest – resulting interalia from the de-risking operated by the EIC Accelerator support, or at later stage as the project evolves and milestones are reached. 

There are 3 main “buckets”, divided as followed: 

Bucket 0: No Go Includes projects that cannot meet the mandatory requirements. Their issues in the assessment or due diligence, at any stage, prevents any investment. 

Bucket 1: Companies are non-investment ready yet 

Includes projects that are not investor ready for regular investors yet; they thus remain very high risk despite the awarded EIC Accelerator support. 

Bucket 2: Co-investment opportunities identified 

Includes projects with immediate interest by the investors in co-investing into EIC selected companies. 

Bucket 0: No Go 

Bucket 0 will include cases for which initial assessment or due diligence, at any stage, reports substantial negative issues preventing any investment. 

The EIC Fund’s due diligence is as it goes a more specific and accurate examination of an operation, meaning that the purpose is to its investment component, findings may lead to question the legality or the rationale of the operation. 

If one of more of the conditions below are encountered, the EIC Fund will recommend to the EC to reject the investment – a decision that may lead the EC to gather a jury of external independent experts to reevaluate the proposal, but in other cases also terminate or even cancel the already concluded EIC Accelerator contract depending on the case (as reported in the official document): 

  • The innovation does not show the expected solid, long-lasting competitive advantage and impact on the basis of which the operation was selected.  
  • The team has changed since the evaluation and does not anymore gather the strong skills, capabilities and motivation needed to get the company off the ground and scale-up.  
  • Other examples of MAC (Material Adverse Changes) have occurred since the initial assessment of the company undertaken by EISMEA, including major changes in management, changes in control, use of bad leaver provisions, serious litigation situations, including among shareholders, or loss of major suppliers or clients or partners on which the company is heavily dependent.  
  • The cap table evidences strong misalignment of existing shareholder’s interest vis-a-vis the company, lack of sufficient incentive for founders and key team, etc. 
  • The beneficiary refuses or is unable to provide information on an existing investor/shareholder and their ultimate beneficial owner(s), in relation to a possible reputational risk for the EU. 
  • An existing shareholder and/or its ultimate beneficial owner (UBO) falls under the cases of exclusion from Union support in accordance with the EU Financial regulation. 
  • Financial data and documentation submitted at a proposal stage contradicts company’s books.  
  • Alleged IP is not directly owned by or accessible to the company or is the subject of litigation 

Bucket 1: when companies are non-investment ready yet 

Bucket 1 will include cases that are not investor ready for regular investors yet, due to remaining very high risk despite the awarded EIC Accelerator support. 

It is recognized that the project has a distinct potential, but it’s not fully developed yet and still needs improvements on some level – or several. 

The lack of immediate interest may result from various shortcomings: very early stage of the underlying technology, a too long planned time to market, a too small market compared to the investment needed etc. 

These are three types of cases are envisaged (as reported in the official document): 

  1. The EC has awarded the support on the condition that it acquires a blocking minority, as the operation falls within an essential area of EU interest (in accordance with the Council Decision on the Horizon Europe Specific Programme); without prejudice to the necessary flexibility required in each case, the EIC Fund may offer to make its investment in at least two tranches in Bucket 1 cases, besides the possibility to provide a single tranche in the form of a convertible instrument. 
  1. The innovation has the potential to have a high impact by addressing a societal need or an EU priority, in particular in the case of strategic technologies: those related to the EIC Accelerator Challenges in the EIC Work Programme, defined as critical technologies and technology roadmaps in the action plan on synergies between civil, defense and space industries as well as in accordance with the update of the 2020 New Industrial Strategy.
    In such cases, operating as a major investor, the EIC Fund will ensure a board member seat in the target companies. External mentoring will be sought. 
  1. In all other cases, the EIC Fund may either invest with quasi-equity or a combination of quasi-equity and equity on EIC Fund own standard terms, or propose to the EC to revert to an uncapped “grant first” support to cover up to 70% of total eligible costs of the pre-TRL9 activities, and recommend milestones that once reached, may attract co-investors and hence trigger the investment component initially awarded by the EC. 

Bucket 2: Co-investment opportunities identified 

Bucket 2 will include cases where potential investors show immediate interest in co-investing into EIC selected companies. 

The EIC Fund will seek that the equity investment – a minority investment in a company made by investors alongside a private equity fund manager or venture capital (VC) firm; equity co-investment enables other investors to participate in potentially highly profitable investments without paying the usual high fees charged by a private equity fund – is at least matched by these other potential qualified investors (i.e. which will cover at least 50% of the round), having an objective of 1:3 leverage for the full EIC investment cycle. 

In order to safeguard EU interest as an alternative to take a blocking minority on their own, the EIC Fund will discuss an agreement with other shareholders; while, on behalf of the EIC Fund, the Investment Advisor – who can assume the role of a consulter or mentor – will negotiate the terms with potential co-investors, including possible mentoring tasks.