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10 myths about the SME Instrument that ruin your chance for EU funding (Part 1)

Yayınlanma tarihi 2 Mayıs 2016

ALICJA GRZEGORZEK

Regional Director at Ateknea Solutions || SME Instrument Expert. There are a lot of myths and prejudices about EU funding. There have been gossips for years that you can get a grant for nothing. Or that nothing is left to a chance and connections are necessary. The ones who were lucky to receive EU funds claim they had an ingenious project and it was a piece of cake. Others claim that it is not worth trying. We all like conspiracy theories. We tend to be suspicious towards others (in particular the ones more successful). It is easy to believe that the European Union is like a lottery - you need a massive amount of luck to get funding. It’s hard to admit failure, re-evaluate project, learn from mistakes and move forward. But you need to do it if you want to succeed.

We will have a closer look at the 10 most popular myths connected with SME Instrument. I believe dismissing them may help you achieve better results next time. Let’s start today with the first three points. The rest will follow soon.

1. The EU gives grants to anyone who applies for funding

It may seem that it is incredibly easy to receive funding from SMEI. Formal requirements include having status of a small or medium enterprise (SME). According to the definition of the European Commission that means employing less than 250 people and having maximum turnover below EUR 50 million. However, the more you get into it, the more complicated it becomes. The SME Instrument is dedicated to Member States and Associated Countries so companies from all over Europe can participate. The main criterion is innovativeness and a real chance to break into the market. Subsidies are granted to the best ones, so you have to devote hard effort to demonstrate you are the best.

In this programme the EU acts as an investor and should be approached as one. The European Commission wants to finance realistic projects proposed by reliable companies with a stable financial position. All that may increase the chances at the time of launching the solution on the market. Like all investors, the EU analyzes strengths and weaknesses of the project, its chance to succeed and the potential return on the investment. The company implementing the project does not have to refund the grant. The return on investment is embodied by a product that is competitive on the global scale, is able to earn and strengthen the European economy.

2. No chance for a grant without connections in Brussels

Leaders in SME Instruments - Spaniards and Italians - are believed to succeed thanks to the powerful lobby in Brussels. Yet, the lobbing cannot help in case of the SMEI. Each application is assessed by four independent experts, who are not aware that they evaluate the same project. Experts include businessmen, scientists, people experienced in establishing start-ups, venture capital advisors, etc. Everyone works on an individual basis, there are no group meetings. Experts provide their subjective opinions to the European Commission. The final score is given on the basis of all partial scores. Sometimes there are great differences among the opinions expressed by different experts.

Why are more projects granted to companies from more mature European markets? They have years of experience behind their success. During that time they could learn what is important for EC. In applications they focus on project implementation and business approach. Moreover, they often use help of experienced consulting companies which specialise in getting EU funds.

3. Novelty = innovation

The European Commission finances projects that are highly innovative. People often understand innovation as something new for their company. Innovation in the SME Instrument is defined in a completely different way. Innovation is understood as a novelty on the European scale, but preferably on the global scale. If the same project received a grant or has been launched in Europe, no other company can get funds from SMEI for it. There is no use submitting the proposal. That is the reason why it is so important to carry out research on the competition (both at home and abroad).

The innovation has to be disruptive. The effects of launching a new solution are important. It should be better than whatever has been done before. Disruptive innovation will replace earlier solutions in a given field with the new one. The innovation should respond to the real needs of a given market and solve a particular problem. The EC evaluates usability of ideas, there needs to be a real demand for the proposed innovation.

The rest of the myths will follow soon.
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