EIC Investments
Within the mandate given by the European Commission following the evaluation process by EISMEA, investment decisions (and their related conditions and management) are subsequently taken by the EIC Fund.
The EIC Fund is an alternative investment fund (AIF) for investing in companies selected by the EIC Accelerator. The European Commission has appointed an alternative investment fund manager (AIFM) to manage the EIC Fund. Because the AIFM is a different legal entity than the EIC Fund, the AIFM is sometimes referred to as “external AIFM”.
The European Investment Bank (EIB) is the unique investment adviser to the EIC Fund. The EIB and the EIC Fund manager are separate legal entities. The EIB provides advice and support to the EIC Fund but does not make the investment decisions. It is the EIC Fund manager (the AIFM) that makes decisions on investments, their structure and terms, follow-on investments and divestments, in accordance with the EIC investment guidelines and having regard to the recommendations of the EIB as investment adviser.
On divestments, the EIC Fund invests patient capital, with a long average perspective on return on the investment. The EIC Fund’s main objective is “impact investment” rather than maximizing return on the investment. The exit strategy for each company is to be set on a case-by-case basis. Exit routes may include IPOs, management buyouts, secondary sales or liquidations.
Further information can be found in the EIC Fund Investment Guidelines.
Investments made under Horizon 2020 EIC Pilot are managed by the EIC Fund as well.
The European Commission has adapted the structure and management of the EIC Fund to the Horizon Europe regulation, and also to draw the lessons from the pilot phase (2019-2020) in order to make the Fund sustainable for the number and amounts of investments expected in the period 2021 -27.
As of Autumn 2022, the European Commission authorised the appointment of an external alternative investment fund manager (the AIFM) to be responsible for taking investment decisions. As of 1 January 2024, the Commission’s ownership (shares) in the EIC Fund are transferred on a temporary basis to the European Investment Bank to manage this shareholding on behalf of the European Commission and with safeguards to ensure the EIC Fund fulfils the objectives set out for the EIC. 31
EISMEA will continue to be responsible for the evaluation process, for managing EIC grant agreements and for coordinating the grant and the equity components. The investments by the EIC Fund are authorised by an Award Decision of the European Commission.
If your company is evaluated positively by the Jury and recommended for an investment component, the information about your application will be transmitted shortly after the Jury interview to the EIB acting as investment advisor for the EIC Fund. Your company will then be contacted by the EIC investment officer to ascertain the urgency of the investment decision.
If your company is in the process of finalising an investment round which is time critical, the EIB will prioritise the due diligence such that an investment decision can be made in a relevant time frame to participate in the round. If your company does not intend to proceed with a fund-raising round in the short to medium term, then your company may be proceed with the grant agreement and the due diligence for the investment will be delayed for a certain time.
For the investment decision by the EIC Fund, the EIC investment guidelines provide details on investment scenarios.
Following an initial assessment implying some level of due diligence, including ‘Know Your Customer’ (KYC) compliance checks (by the EIC Fund), the EIB, as investment advisor, will categorise the potential transactions into investment scenarios or “buckets”. Investment scenarios are based on companies’ investment maturity and their ability to attract co-investments. The EIC investment will be structured according to the investment scenarios.
In some exceptional cases, the EIC Fund may reject an investment when initial assessment or due diligence, at any stage, reports substantial negative issues in accordance with the EIC investment guidelines.
In addition, the EIC Fund may recommend that the applicant continues with the grant support and returns for consideration of the investment at a later stage. The investment for a blended finance project must take place no later than 12 months following the end date of the grant.
The investment component is tailored based on the assessed investment scenario and may take different forms. It may consist of convertible instruments (i.e. loans/bonds/notes and other similar instruments such as participation rights and simple agreements for future equity (SAFE)), or direct equity as part of a funding round with other co-investors.
The EIC Fund may use convertible instruments and combination of quasi-equity instruments in cases that the company is not yet sufficiently mature to attract other investors but is expected to raise a funding round with other investors within a reasonable time period.
The EIC Fund uses direct equity in cases where potential investors show immediate interest in co-investing into EIC selected companies. The EIC Fund will seek that the equity investment is at least matched by other investors (i.e. which will cover at least 50% of the round), having an objective of achieving at least a 1:3 leverage at the level of the EIC Portfolios.
The EIC Fund may either invest with quasi-equity or a combination of quasi-equity and equity or postpone the investment until the company has matured enough.
The Investment Guidelines do not set a fixed threshold or formal test for determining when a company has “sufficiently tried” to attract investors. This assessment is therefore made on a case-by-case basis, taking into account the company’s demonstrated efforts to engage private investors, the reasons why a priced round could not be completed at that stage, and the extent to which interim financing could help the company progress towards increased maturity or investment readiness. In such circumstances, quasi-equity may be considered as an exceptional bridging measure, with the clear expectation that a qualified equity round involving private investors will follow once conditions permit.
According to the EIC Fund Investment Guidelines, Qualified Investor means an investor deploying privately sourced funds in an EIC Fund Final Recipient with demonstrable know-how and experience in the relevant market, technology and jurisdiction. Such a qualified investor adds to EIC Fund due diligence with the purpose of both valuing the relevant asset or Investment on market terms and providing the underlying entity, in case of an investment alongside the EIC Fund, with subsequent crucial support for a successful market entry and scale-up.
The term “new investor” is not defined as a fixed legal concept in the EIC Fund Investment Guidelines but generally refers to an investor not previously present on the company’s shareholder base and not affiliated with the company, whose participation represents independent, marked-based validation rather than merely additional capital from existing or connected investors.
While follow-on investments by existing investors are recognized and can be valuable, the entry of a new investor is typically seen as a stronger signal of independent market validation and price discovery, which are core principles of the EIC Fund’s equity intervention.
This is not a formal requirement but reflects the policy objective of the EIC Fund. The Fund is designed to catalyse private investment and support market validation, rather than replace or permanently substitute market financing. The participation of a new investor can provide additional evidence that:
- the company is attracting independent market interest,
- valuation and terms are supported by external price discovery, and
- public funding is effectively crowding in private capital rather than primarily recycling insider funding.
Based on the concept of a qualified investor in the EIC Fund Investment Guidelines, lead investors typically include institutional venture capital or growth equity funds with a relevant sector experience; specialist technology or deep-tech investors capable of robust due diligence and active support; professional family offices acting on market terms and with sufficient investment capacity.
In assessing potential lead investors, particular attention is given to the alignment of interests, the ability to act on market-based terms, and the capacity to provide independent validation through due diligence and active engagement. Certain investors, such as public or semi-public bodies, strategic or corporate investors with primarily commercial objectives, or entities investing under policy-driven mandates may participate in financing rounds, but their role as potential lead investor is evaluated in light of these considerations, including whether their investment approach, incentives, and governance arrangements are consistent with the objectives of market validation and catalytic private investment.
Under the 2026 EIC Work Programme, the maximum investment amount that can be requested by applicants to the EIC Accelerator call is EUR 10 million.
Higher amounts for equity investments (between EUR 10 million and 30 million) can be requested under the EIC STEP Scale up call.
Under the 2026 EIC Work programme there are no preconditions to apply for equity only support (previously, this was conditional on an eligible prior grant support).
Grant-only beneficiaries under the EIC Accelerator pilot in Horizon 2020 can apply for an investment component in Horizon Europe. Companies awarded a grant only under the Horizon 2020 EIC pilot Accelerator and the Horizon Europe EIC Accelerator may be eligible for fast track.
There are no excluded investors by geography a priori and the EIC Fund has and will continue to co-invest with investors based in other regions. However, the EIC is an initiative of the EU and where relevant, considerations will take into account risks to EU economic security. In specific areas of strategic technology (described in the Work programme 2026) a company may be excluded if it is controlled by entities outside the EU or the associated countries, or the Commission may require that the investment agreement includes appropriate safeguards.
When implementing investments the EIC Fund will ensure that supported companies keep most of their value, including their IP, in the EU or in the Associated Countries in order to contribute to their economic growth and job creation. 33
Before submitting the full application, applicant companies will need to give consent to share necessary information with the EIC Fund. Applicant companies will also be offered the opportunity to share certain data and information with investors who have undergone a prior EIC due diligence process and who may wish to invest in the company or project and assist the company in developing its idea into a business plan.
For applications for blended finance (including an investment component) or equity only support, the EIC Fund will start the negotiation process to structure the potential investment agreement. During this stage, the EIC Fund or the Agency will also look for other investors. The company will be asked for its consent before other investors are contacted or engaged in negotiations.
In order to prepare an informed and tailor-made investment recommendation, the EIB in its role as Investment Advisor performs the commercial and financial due diligence. In addition, technological due diligence (full technological due diligence in the case of the STEP Scale Up call) is performed as part of the overall due diligence process. The technical due diligence may performed at this stage may also build upon the technology assessment performed beforehand during the evaluation phase.
The purpose of the technological due diligence is not to re-assess the project, but to complement the evaluation process and dig in depth specifically on the technology (protection, validity, “investibility”) and its potential market (landscape, competition, positioning), beyond the information initially provided and the statements made by the company in the proposal.
The technological due diligence contributes to better-informed investment decisions paving the way for other investors to invest alongside the EIC Fund. The outcome may also help the EIC and the company to take a critical looking at the proposed technological and commercial milestones, and to structure the investment accordingly.
The report is based on the strong technical background and the proven expertise of the selected expert that may interrogate the claims of the company, contact the company to collect further information and eventually its clients and network. The expert may also consult any other relevant sources of information.
In order to protect the activities and interests of the company, the expert signs the standard Horizon Europe expert contract template, including a strong impartiality and confidentiality clause and conflict of interest.
The technological due diligence exercise is launched in coordination with the EIB investment Officer. Generally, it is initiated immediately after the finalization of the evaluation and the selection processes, aiming for the best possible timing f in view of an upcoming investing opportunity.
The company is informed about this step in the invitation to the negotiation letter and it is also foreseen in the EIC Fund Investment Guidelines.
The technological due diligence might be performed in parallel with the negotiation phase and therefore does not slow down the Investment process.
The Investment Guidelines do not specify a formal validity period for Tech DD. In practice, Tech DD may be revisited where there are material changes to the company or where significant time has elapsed.
The European Commission will set a maximum investment amount as part of the Single Award Decision for EIC support to the company. In accordance with the provisions of the Work Programme, this amount will be based on the amount requested by the company at the application stage, together with a flexibility margin of up to €2 million above the amount requested by the company for the EIC Accelerator and a €5 million flexibility for STEP.
Within the indicative maximum investment amount laid down in the Single Award Decision, the EIC Fund will establish the investment amount in the light of the discussions on valuation and possible equity stakes in the potential investee companies. In general, the EIC Fund will align its valuation for the purposes of equity investment to the valuation set by the market (i.e. by the private qualified investors co-investing alongside them). Valuation methods vary depending on the business models, markets and sectors, technology and other intangible aspects to consider.
When deciding on the investment amount, the EIC Fund will also take into account the investment amounts from co-investors, so as to match the EIC Fund’s investment with investment from leading co-investors at least 1:1 (and seeking a leverage effect of at least 1:3 throughout the investment horizon and across the portfolio). The investment amount will also take into account the amounts available in the accounts of the EIC Fund.
In close synergy with the Investee Programme, the Accelerator, in its blended finance and equity financial support forms, should finance projects run by SMEs, including start-ups, and, in exceptional cases, small midcaps, which are either not yet able to generate revenues, or not yet profitable, or not yet able to attract sufficient investment to implement fully their projects' business plan. Such eligible entities would be considered to be “non-bankable”, while a part of their investment needs could have been or could be provided by one or several investors, such as a private or public bank, a family office, a venture capital fund or a business angel. In that way the Accelerator is intended to overcome a market failure and finance promising, but not yet bankable entities engaged in breakthrough market-creating innovation projects. Once they become bankable, those projects could be financed under the InvestEU Programme.
Yes, provided that the following conditions assessed positively by the EIC Fund’s advisor:
a. The EIC Fund investment in companies shall not crowd out any financing or investment from the market or InvestEU supported sources, and the total amount of investment or financing does not exceed investment needs of the company to implement its business plan in a given funding round.
b. Companies that can only partially cover their investment needs to implement its business plan in a given funding round from any market or InvestEU supported sources are considered as “non-bankable” for the purposes of EIC support, as set out under the Horizon Europe Regulation.
In these cases, the investment by the EIC Fund is considered necessary to de-risk co-investments from the market sources but also the InvestEU programme, and to act as a catalyst to enable the co-investments.
No. The EIC Fund makes equity investments which are not repayable in the same way as loan financing. Rather the EIC Fund would exit a company when another investor buys the shares of the EIC Fund and the company no longer needs the EIC Fund investment to fulfil its financing needs for equity. In any case EU support (e.g. InvestEU covered financing) cannot be used to repay another Union support.
The Commission will assess whether applicant companies in certain technology areas (currently areas within the fields of AI, semiconductors, quantum, biotech) would pose economic security risks if the technology is acquired by a non-EU actor. This is a case-by-case assessment. If a risk is identified, then the Commission will authorise the EIC Fund to include a relevant measure in the investment agreement. The potential measures are set out in the EIC Fund Investment Guidelines and include, for example, a provision for the company headquarters to remain in Europe during the investment period. The measures will be agreed with the company and with other investors in line with the objectives of the successful growth of the company while avoiding that technology is acquired or leaked in way that could damage European economic interests.
Where companies are identified as developed strategic technologies, the EIC will also aim to provide additional support such as access to follow on funding, larger investments (through the STEP call), and where relevant providing a highly experienced external person to join the company board as a non-executive director.
Under the EIC Fund Investment Guidelines, companies are not awarded equity as such but are selected to enter due diligence for a potential EIC Fund investment up to the amount indicated in the EC Award Decision. The Guidelines do not provide for a guaranteed or minimum first payment percentage, and there is no standard or automatic disbursement applicable across all EIC Fund investments. Any initial investment, where applicable, is determined on a case-by-case basis following due diligence, taking into account the company’s maturity, financing needs, and the envisaged investment structure. In specific and contextual situations, the EIC Fund may decide to structure its investment in stages, however, such arrangements are not the default approach and do not imply an entitlement to a minimum disbursement. The size and timing of any initial investment are defined in the investment agreement and remain subject to further assessment, conditions, and the overall financing context.
The six months applies to the completion of the milestone in order for a company to be eligible for the investment component. The EIC Accelerator Grant First companies are eligible to enter the equity component negotiation process, provided they meet one of the following conditions:
- the Key Commercial/Co-investment Milestone is achieved no later than six months before the end of the project,
or
- the Key Technological Milestone is achieved no later than six months before the end of the project.
The due diligence and decision on the investment then follows the normal process and there is not a formal deadline for the investment to be completed (but the Term Sheet offered to the company will specify an expiry date).
For due diligence & equity investment process purposes, the EIB in its capacity as the EIC Fund’s investment advisor, through their dedicated team of investment officers allocated to each case selected through the EIC Accelerator for a potential equity investment by the EIC Fund.
For the purpose of this question, we understand that you refer to a director that refers to a full voting member of a company’s board which is distinct from an observer role. Where foreseen, the right of the EIC Fund to appoint a director to the board of an investee company is set out in the investment agreement. The investment agreement establishes whether such a right exists, and the identification and nomination of a specific director take place after the investment decision.
A public page exists listing few appointed company board representatives: Company Board Representatives - European Innovation Council. The list of eligible directors has been determined based on a public call for expression of interest conducted in March 2024 (EIC Fund Seeks Experienced Board Members to Shape the Future of Innovation - European Innovation Council).
Directors appointed by the EIC Fund to the Boards following an EIC Fund investment, they are not necessarily limited to EU nationals, but specific company-law constraints may apply per jurisdiction.
Where appointed, EICF nominated directors act in a non-executive capacity on the boards of portfolio companies. Their responsibilities are exercised at board level and typically relate to strategy, governance, and oversight, and, where relevant, to discussions supporting growth, scale-up, and financing. In accordance with applicable company law, EICF nominated directors owe their fiduciary duties to the company and all shareholders collectively. The specific role and contribution of an EICF nominated director are defined at the time of appointment, taking into account the company’s development stage, existing board composition, and identified gaps in board-level competencies. The appointment is agreed by the EIC Fund and discussed with the company and the investors represented on the board and is intended to be complementary to the profiles and roles already present, rather than duplicative, and to address concrete governance or strategic needs of the company.
The EIC Fund does not seek to own or control companies’ intellectual property, but may assess and, where appropriate, include proportionate conditions related to the protection, ownership, or transfer of key IPR as part of due diligence and the investment agreement, in line with Horizon Europe rules and the objective of safeguarding EU interests.
The EIC Fund Memorandum is an internal governing document of the EIC Fund and is not published as a standalone document for applicants. Applicants are not expected to access or rely on this document directly. Instead, the applicable rules, principles, and constraints are reflected in the publicly available EIC Fund Investment Guidelines, the EIC Work Programme 2026, and, where relevant, the Horizon Europe Model Grant Agreement and its annexes. Additional documents and templates that are relevant for a specific company (such as draft investment agreements or transaction-specific terms) are made available during the investment due diligence and negotiation process, as appropriate. Applicants should therefore rely on the published programme documents for general guidance and on the materials shared during due diligence for transaction-specific provisions.