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: 

“Characteristic of Investment” here: 

“Buckets” here: 



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:

Methods and Investment Strategies 

In general, the EIC Fund will evaluate projects in sight of equity investment to the valuation set by the market. 

Valuation methods may vary depending on the business models, markets and sectors, technology and other aspects to consider.  

Even though there is no standard practice, there are some methods that are commonly used by investors. As reported in the official documents, they are listed below: 

  • Multiples of Earnings: for a start-up, it is usually considered a Times Revenue Method (sometimes applied on an expected value). It indicates a business’s maximum worth by assigning a multiplier to its current revenue; multiplier benchmarks vary according to industry, economic climate, and other factors.  
  • Fair Market Value: it reaches the value of a company by comparing it either to similar businesses that have sold previously or to a peer group of comparable companies listed on the stock markets.  
  • Book Value: it takes into consideration the value of the business’s equity by taking into account the market value of the assets, intangible assets, minus total liabilities (eventually adjusted if there is a relevant swing in the cost of debt).  
  • Price of recent investment: takes account of the valuation used in a recent previous investment in the company, then estimates the current valuation based on the value creation from that reference point.  
  • Discounted Cash Flow: it values a business based on its projected cash flow discounted by a factor (usually the average cost of capital); the result is present value. It is more often applied to companies in growth or mature stage as cash flow generation is needed.  
  • Other asset-Based methods, such as among several other asset-based approaches there is the “liquidation value”. 

Please note that these methods are market references for valuation purposes and tools for companies in their negotiations with potential investors. 

Often, these negotiations are time consuming and interfered by intangible factors such as bargaining power, which will significantly influence the valuation. 

Here, you can find some FAQ about EIC Investments: 

 Equity / Equity-type Investments 

An emerging business may use different types of instruments to funds its growth.  

The financial instruments used by the EIC Fund will take the form of equity or quasi-equity investments. In this case, there are a standard equity and quasi-equity instruments, and are summarized as follows, like stated in the official document: 

  • Common shares: represent an ownership interest in a corporation, including an interest in earnings and dividends. They may be voting or non-voting and may be divided into classes with special voting privileges assigned to each class. In the VC market, founders and management team usually hold common shares. 
  • Preferred shares: represent a hybrid in the sense that it is an equity interest with debt-type features such as seniority at dividend payments and liquidation proceeds. VC funds usually hold preferred shares.  
  • Convertible instruments: like convertible loans/bonds/notes, participation rights, SAFEs etc. that have a convertibility feature attached to a debt instrument that is attractive to the issuing company, since they are aimed to postpone dilution until the company’s next equity funding round. They offer flexibility to investors allowing them to shift the risks and rewards of their investment to some point in the future after the initial investment.  
  • Other equity-type instruments appropriate to achieve the objectives of the EIC Accelerator 


The EIC Fund will invest patient capital, with a long average perspective on return on the investment (7-10 years) with a maximum of 15 years in general; such level of return is assessed on a case-by-case basis. 

The exit strategy for each company is also to be set on a case-by-case basis given the specificative of each business plan, industry, expected holding period as well as the development of the companies compared to the initial milestones set. Exit routes may include IPOs, management buyouts, secondary sales or liquidations. 

It is implicit that the EIC Fund’s main objective is “impact investment” rather than maximizing return on the investment.  


Here you can find a list of some of the beneficiary companies for Equity Investments. As stated in the website, all investments are preceded by a thorough evaluation by external experts, a due diligence process overseen by the EIC Fund Investment Committee, and a final decision by the EIC Fund Board of Directors.