Horizon 2020 SME Instrument overview, tips, hints, proposal writing

1. FINANCING YOUR INNOVATIVE
BUSINESS WITH EU FUNDS
Horizon 2020 success story
Sviatoslav Sviatnenko
Director of Business Development,
Borsch Ventures

2. DISCLAIMER
• based on first hand experience, facts and
evidence as of March, 2017 [changes may
occur as program develops]
• This is “Workshop", so lots of slides
[sorry]
• lots of text [that may be hard to read] as
presentation will be put online shotrly
and used as a reference material
• I speak on behalf of myself, not
representing official position of EU or any
EU-funded project

3. BIO: SVIATOSLAV SVIATNENKO
ssv@borschventures.com
s.sviatnenko@gmail.com
• MA European Studies (Maastricht
University, the Netherlands)
• Director of Business
Development, Borsch Ventures
• SME Instrument phase 2 grant
(1.2M Euro), 2 Seals of Excellence
• Coordinator PVCloud H2020 SME
project
• Top 30 under 30 according to
Kyiv Post

4. PLAN
• Horizon 2020 Overview
• Horizon 2020 SME Instrument Overview
• H2020 SME Instrument proposal
• Tips, Hints, and Mistakes

5. HORIZON 2020: ABOUT
nearly €80 billion of funding
available
Horizon 2020 is the financial
instrument implementing the
Innovation Union, a Europe
2020 flagship initiative aimed
at securing Europe's global
competitiveness.
7 years till 2020
The overall success rate of
eligible full proposals under the
first 100 calls is around 14%,
under SME Instrument is about 5-
6%
The 20% budget target for SMEs
has been achieved
the biggest EU Research and
Innovation programme ever

6. TYPE OF BENEFICIARIES

7. HORIZON 2020: FOR WHOM?
• Academia, R&D centers, Universities
• Public institutions (e.g. City Hall, PPPs)
• Corporates (small, mid, large Caps including public
companies, international companies)
• SMEs
• Start-ups
• NGOs, non-profits
• FIs (Banks, VC/PE Funds, business angels etc)
• Business Support organizations, clusters, centers,
incubators etc
• Consultancies/legal firms
• …

8. H2020
WORK
PROGRAM
• Priorities
• Budget
• conditions&
requirements
• Current WP
ends in 2017,
new one to be
published in Q3

9. 61+ proposals/projects
95% not coordinators
Ratification in mid-
2015
Total – around
12M Euro
Average
grant –
200,000
EUR
«Українські науковці з університетів і науково-
дослідних інституцій матимуть доступ до великих
ресурсів, їх заявки конкуруватимуть з усіма
грантовими заявками європейських країн», —
наголосив міністр освіти і науки Сергій Квіт.
Ukrainian teams will receive the highest
subsidies for applications submitted to Marie
Sklodowska
Curie - RISE (4.16 M€), coordination and
support actions (CSA - 2.06 M€) and research
projects (RIA -1.91 M€).
But…
Ukraine’s contribution to the programme (with 95%
discount) is…
35,5M EURO!

10. CASE 1: AGRI CALL
SFS-02 RIA: Teaming up for good: Exploiting the
benefits of species diversity in cropping system
Expected Impact:
Activities will support the adoption of productive and
resilient agricultural systems which capitalise on the
benefits of high plant species diversity.
Goal to be achieved via:
• scientifically supported and field tested evidence on the
mechanisms underpinning beneficial crop associations
and their effects on crop performance and product
quality;
• increasing farmers' and breeders' knowledge of
potential benefits of 'plant teams' (e.g. with regard to
resource facilitation, pest and disease
restriction/control);
• promoting diversity-rich crop management practices
01
02
03
04
Reimbursement
rate: 100%
Up to 5M Euro
per project, total
budget 10M
4 submitted
proposals
2 proposals above
threshold
requesting
9,999,363 Eur

11. CASE 1: FISHERY
SFS-20-2017: Towards a science-based
regionalisation of the Common Fisheries Policy
The new Common Fisheries Policy (CFP) envisages a regionalised
ecosystem-based approach relying on detailed measures proposed
jointly by Member States under the umbrella of common principles
and benchmarks set up in EU legislation. This will require choosing
appropriate management units (fisheries, fishing gears, sea basins, fish
stocks, stock assemblages, target fleets, geographical units, etc.) and
combining in an innovative manner management instruments and
new governance mechanisms adapted to specific regional needs.
01
02
03
04
Reimbursement
rate: 100%
Up to 6M Euro
1 submitted
proposal
100% of projects
funded

12. CASE 3: INTERNATIONAL
NETWORK OF BIZ SUPPORT
ORGS
• INNOSUP-01-2016-2017: Cluster facilitated projects for new industrial value chains
• Budget was up to 5M for credible international consortiums (new calls in 2018)
• Goal was to:
• 1) validate ideas for structured innovation projects driven by SMEs from different
sectors and countries in collaboration with other innovation actors and facilitate the
coordination towards new industrial value chains through this collaboration space.
• 2) support innovation activities and/or channel a mix of different targeted
entrepreneurial and innovation support measures (such as mentoring, coaching,
innovation and technical assistance vouchers, etc.) directly to the innovation actors of
the validated innovation projects to further support their development, integration
and large-scale demonstration in a strategic manner.
• At least 75% of the total proposed budget shall be allocated to support
innovation in SMEs directly, whereby the SMEs benefit by either participating in
the consortium or by being supported as third party enterprises.

13. CASE 4: EIB/EIF PROGRAMMES
UNDER H2020 (UNDER RISK
FINANCE)
• The European Commission and European Investment Bank Group are
joining forces to encourage banks and other financial intermediaries
to lend or provide equity to innovation-driven companies through
InnovFin – EU Finance for Innovators under H2020 Risk Finance
• E.g. InnovFin Equity - managed by EIF - is, in addition to the InnovFin
SME Guarantee Facility, part of “InnovFin – EU Finance for Innovators”,
an initiative launched by the European Commission and the EIB Group
in the framework of Horizon 2020.
• Via InnovFin Equity, EIF provides equity investments and co-
investments to or alongside funds focusing on companies in their pre-
seed, seed, and start-up phases operating in innovative sectors
covered by Horizon 2020, including life sciences, clean energy and
high-tech.
• Under InnovFin Equity, EIF targets investments in around 45
funds, mobilising a total amount of EUR 4-5 bn to be invested in
enterprises located or active in the EU and Horizon 2020
Associated Countries (Participating Countries).

14. INNOVFIN PRODUCT PORTFOLIO

15. CASE 5: SME INSTRUMENT
• Through the SME Instrument, the European Union wants to
finance the most innovative small companies with a high
growth potential.
• SME Instrument looks for internationally-oriented SMEs to
support them in implementing high risk, high potential
projects and ideas.
• The Instrument is worth around €3 billion over seven years
and offers fast and simple grants for business innovation
feasibility studies (Phase 1) and demonstration projects (Phase
2).
• Investment-mature concepts can in addition benefit from
business development advice and other support services
(Phase 3).
• The application process is easy but only the very best projects

17. PHASE 2 OVERVIEW
Project duration: 12-24 months
Proposal – 30 pages+
Financing: 0,5-2,5M Eur and 70% of total project cost (as a
general rule)
For health-related – 100% grant, up to 5M and duration
may be expanded
Success rate: 6%
12 days of business coaching:
• Bus dev (marketing, sales, fundraising).
• Organizational devt (optimization * efficiency)
• International collaboration & value chains devt.
Targeted SMEs:
• High growth potential + innovation
• Internationally-oriented
• Value to Europe and the world
Financing is for:
• Demonstration
• Market Replication
• Research
• Development
• Minuaturization
• Testing
• Pilot
• Prototyping
• Scaling up
• Bus dev
• Communication
• Commercialization
• IPR

18. SME DEFINITION
• A micro, small or medium-sized enterprise
within the meaning of Recommendation
2003/361/EC. Necessary (but not sufficient)
conditions for being an SME are a number of
employees smaller than 250 and an annual
turnover not exceeding €50 million, and/or an
annual balance sheet total not exceeding €43
million.
• These ceilings apply to the figures for
individual firms only. A firm which is part of
larger grouping may need to include
employee/turnover/balance sheet data from
that grouping too.
• More details are explained at:
http://bit.ly/SMEdefinition

19. SME INSTRUMENT
For whom?
Start-ups Micro biz Small biz Medium
biz
Academi
a spin-
offs
Product/
service
business
Family
business
With high growth potential and value to/positive impact on the
EU/the world

20. CALLS FOR PROPOSALS TOPICS
• Open Disruptive Innovation Scheme (ICT)
• Accelerating the uptake of nanotechnologies advanced materials or
advanced manufacturing and processing technologies by SMEs
• Dedicated support to biotechnology SMEs closing the gap from lab to
market
• Engaging SMEs in space research and development
• Supporting innovative SMEs in the healthcare biotechnology sector
• Accelerating market introduction of ICT solutions for Health, Well-Being
and Ageing Well
• Stimulating the innovation potential of SMEs for sustainable and
competitive agriculture, forestry, agri-food and bio-based sectors
• Supporting SMEs efforts for the development - deployment and market
replication of innovative solutions for blue growth
• Stimulating the innovation potential of SMEs for a low carbon and efficient
energy system
• Small business innovation research for Transport and Smart Cities
Mobility
• Boosting the potential of small businesses in the areas of climate action,
environment, resource efficiency and raw materials
• New business models for inclusive, innovative and reflective societies
• Engaging SMEs in security research and development
Cut off dates
Phase 1:
• May 3
• Sept 6
• Nov 8
Phase 2
• April 6
• June 1
• Oct 18

21. FEW FACTS
Almost a third of the
selected companies
are start-ups, meaning
that they are younger
than 3 years.
Success rate is 6%
Harvard Univ 6%
Mohylianka 5%
Startupbootcamp 3-5%
Y Combinator 3-5%
Techstars 1-1,5%.
Job at Google 0.5%
Winners raised € 692
million in private
equity (as of early
2016)
The average amount
of grants in Phase 2 in
2014- 2015 was € 1,7
million
11% Accelerators & 12 Academia
15% 50-249 employees
40% resubmissions
22% upscale stage
28% in seed stage
35% in the project-to-project stage
Company stage

23. BY
COUNTRY
Key reasons:
• Role of
government
(hands on help,
NCPs)
• Industry of BSO,
consultants,
lawyers,
innovation
clusters etc
• Widespread
knowledge about
H2020

24. ANGUILLA - UKRAINE 1:1

25. Mid 2015
H2020 – EU-
Ukraine deal,
ratified by Rada
First application
to SME
Instrument from
Ukraine
Late 2015
Seal of Excellence, early
2016,
First and only above
threshold proposal from
Ukraine as of late 2016
4th attempt,
recommended for
funding, first and
only in Ukraine
under Phase 2 so far
2016
Dec – agreement
signed
1 Jan 2017,
project started
4AM – email
from EC
OUR EXPERIENCE
Timeline
• 4 submissions, 70+ iterations of the proposal, 10 months of work, months of
bureaucracy with EU (no pain, no gain..)
• We competed with 259 companies from Europe under our call, only 10 got funded
(3,8%)
• Average success rate for our cut off date was 5.8% (and 6.2% for applicants who went
through Phase 1)

26. SEAL OF EXCELLENCE:
“ДЕНЕГ НЕТ, НО ВЫ
ДЕРЖИТЕСЬ”

27. Product Model
Market Partnerships
POLYTEDA CLOUD PROJECT
New cloud-based
business model “pay
per use”
Winning foundry
partners
Entering
European Market
first
European focus
InnovationProduct customization
• POLYTEDA CLOUD is receiving €1,220,888 financing for 2-year project “Innovative Cloud-Based PV
Workflow for Semiconductor Foundries” that will contribute to restoring the competitiveness of
European microelectronics industry.
• http://polyteda-cloud.com/images/stories/docs/Press_release_Polyteda_ENG-rev1.pdf

28. MYTHS
Misuderst
andings/
Myths
Legal documents
Consortium
Co-funding
SME type
Legal documents required prior to application (financial
statements, balance sheet, registration extract, VAT form,
etc)
Consortium/academic institution required as a
partner
no and financial audit if 2+ partners
30% co-funding requirement to show/prove prior to
the application
convincing justification where to get 30% is
enough
Only for start-ups/only for small business/only for
middle business/only for 3+ years companies/only
for companies with multimillion EBITDA etc
winners are diverse
F
T
F
T
F
T
F
T
no document checks till the moment you win

29. 04 No page limit
Company
05 No page limit
Ethics & Security
03threshold 3 out of 5
Implementation
02(1.5x), threshold 4 out of 5
Impact
01threshold 3 out of 5
Excellence
SME INSTRUMENT
PROPOSAL SECTIONS

30. IMPACT 1.5X
Market &
Customers
competitors Business strategy IP management Strategic
communication
well-
analyzed,
as detailed
as possible
yes, you do
have
competitor
s
clear and logical (and
H2020 is a logical
next step of a
broader strategy),
shall be at least 3
to 10 years & and
calculated biz/fin
model and
projections
how you plan
to protect
results of
this
project?
involving
relevant
stakeholders,
ongoing
process
evidence/fact based (e.g. reports, customer surveys, business cases, quotes etc)

31. EXCELLENCE
1
2
3
4
Clear, justified, logical objectives
that align with project activities
and within budget
European and global social,
economic, industrial challenges
your project will help to overcome
Describe your innovation novelty
and differentiation [in general,
keep your secrets]
Clear realistic outcomes of the
project (revenues, jobs, market
share etc) with timeline
Describe technology
readiness level and
what have led to it, as
well as the project
concept (at minimum
TRL6 at start, and
TRL8-9 at the end of
the project to allow
commercialization)
Prove innovation
potential and novelty

32. IMPLEMENTATION
Organizational structure
and management
procedures should
match the project
scale (e.g. different
functions and
decision making
procedures)
Work packages, tasks,
milestones and
deliverables are well-
described, linked/logical
[be ware of
confidential/public info]
Realistic & measurable
& verifiable project
plan; enough person
months and within
the budget
If subcontract - best value for money and no opportunity to change the subcontractor
(only exceptionally, e.g. bankruptcy of subcontractor)

33. 4.COMPANY INFO
PITCH AND
“SELL ” YOUR
COMPANY
RELEVANT
EVIDENCE
Pitch and “sell”
you company and
your [existing]
team (HR
recruitment is not
covered) by
showing
references, clients,
experience etc.
Describe your project
experience that is
relevant
List all kinds of
supporting info
(articles, letter of
intents, certificates
etc) that will back
your story
No page limit

34. ETHICS & SECURITY
• Do not underestimate this section -
dual use, human-related research,
data protection, potential
abuse/misuse etc
• Likely, all companies from Ukraine
will face “non-EU country with
potential terrorist abuse of research
results” after the win (unless got lucky
with Ethics experts..)

35. if you decide to
apply - long
process 6months+
polish the
language &
Brussels
English Find
data/market
studies
allocate enough
time prior to
deadline prior
for submission
don't give
tasks to
your
assistant
Халяви
немає
MISTAKE#1: DO NOT
UNDERESTIMATE THE WORKLOAD

36. Study the
programme
conditions/ideology
Read the call
info and study
legal
requirements
Check
whether the
industry
focus aligns
Revenues+jobs
TRL level
“disruptive”
innovations
MISTAKE#2: DEFINE WHETHER THE
COMPANY/PROJECT REALLY FITS THE
CALL/PROGRAMME IN THE FIRST
PLACE

37. know the
regulations know the costs
type
think of
subcontractors if
any
Know your
taxes
potential
payment
schedule
Budget is key
MISTAKE#3: DO WORK ON YOUR
BUDGET
There is some flexibly (e.g. you can transfer between budget categories), but in general you
will work under budget you submitted (even if project starts 4-6months after)

38. MISTAKE#4: DO ANSWER
EVERYTHING
answer all the questions/address each and every point of the
proposal template:
• Gender
• IP
• Ethics
• Commercialization
• Communication

39. I
EU
A
I
EU Strategies , reports,
agendas, other documents
INTERVIEWS
Learn from the best in EU
ARTICLES on official
websites
To identify best practices
INSIGHTS & International
Network
To build on knowledge
HINT#1: KNOW EU
STRATEGIES/POLICY/PRIORITIES
Horizon 2020 is not a charity and funds potentially global
businesses that generate revenues ,create jobs, and have
European/international dimension

40. SOLID
Business Plan
STRATEGIC
Commercialization
strategy
INNOVATIVE
Product or service
IN-DEPTH
Knowledge of market,
customers, competitors
H2020 is not just about the best
product/technology but convincing
commercialization strategy
HINT#2: NOT ONLY GOOD/BEST
TECHNOLOGY BUT BUSINESS

41. HINT#3: START ASAP (=NOW)
• start ASAP = now.
Success rate is falling down, competition increases, more and
more good proposals
• There will never be more time than now to prepare a
project

42. HINT#4: KEEP TRYING
• try-fail-repeat - Keep trying, it is real. Get feedback from an
expert, resubmitted proposals are more successful, seek
external advice, speak to those who won (info is public),
learn
it is REAL

43. LIST OF USEFUL INFO:
• Templates
http://ec.europa.eu/research/participants/da
ta/ref/h2020/call_ptef/pt/2016-2017/h2020-
call-pt-sme-2-2016-17_en.pdf
• Easme https://ec.europa.eu/easme/
• Participant portal and calls
https://ec.europa.eu/research/participants/p
ortal/desktop/en/home.html
• CORDIS and existing projects
http://cordis.europa.eu/

44. • https://ec.europa.eu/programmes/horizon2020/si
tes/horizon2020/files/horizon_2020_first_results.p
df
• https://ri-
links2ua.eu/object/document/234/attach/Statistic
s___Analyses_of_Ukrainian_Participation_in_HORIZ
ON_2020__updated_after_274_calls_.pdf
• https://ec.europa.eu/easme/sites/easme-
site/files/catalysing_european_innovation_-
_easmes_report_of_the_first_two_years_of_implem
entation_of_the_sme_instrument_2014-2015.pdf
• https://ec.europa.eu/easme/sites/easme-
site/files/15_facts_web.pdf
• Self evaluation -
http://ec.europa.eu/research/participants/data/re
f/h2020/call_ptef/ef/2016-2017/h2020-call-ef-
sme-2016-17_en.pdf