IRSUS training: SME Instrument & Fast Track to Innovation (September 2018)

This Project has Received funding from the European Union’s Horizon 2020
research and innovation programme under grant agreement Nº 7799901
IRSUS
PUBLIC FUNDRAISING
ZABALA INNOVATION CONSULTING

Figures
2
Years of
experience
Qualified
professionals
Offices located
internationally
Clients Success rate in H2020
*UE rate:11%
30+ 230+ 12 1,500+ 33%
*

Who I am As a senior consultant with more than seven years of experience in Zabala
Innovation Consulting and hold a Master’s degree in Chemical Engineering
from the University of Salamanca, I have been working on the preparation
and management of relevant projects and proposals for different
European programs in a wide range of sectors, such as oceanography,
energy, chemistry, renewable energies, etc.
Currently, I am working in Brussels close to the European Commission in
representation of an international business organisation to improve its
positioning within the European Innovation support framework:
positioning in influential forums, advising on financial aspects and
positioning, monitoring and identifying European and multilateral tenders
of interest, participating in specialised events and forums, interviews with
strategic agents, analysing and monitoring the European Commission's
work programme and analysing and monitoring European legislative
measures.
I am also an expert in SME and FTI programmes, during the past three
years I have participated in the preparation and/or assessment of more
than 30 projects.
Previously, I also worked for the Energy Agency of Avila being involved in
attractive projects for renewable energy, environment and sustainable
programmes.
Mónica de Juan
R&D and Innovation consultant

Who I am I am PhD in Industrial Engineering by the Public University of Navarre
(Spain). My interest in entrepreneurship and business strategy in mature
companies and start-ups have led me to be Expert In International
Business Management by the Polytechnic University of Madrid acquiring
competitive skills in business plans, strategic management, competitive
intelligence and other management skills.
In many occasions entrepreneurship is born of innovation and that's how I
began my professional career, as a researcher at the Public University of
Navarra, participating in different research lines and projects directly
related to metallurgy and corrosion. Likewise, this knowledge led me to
spend a year at the National Centre for Metallurgical research (CSIC).
After seven years of experience in basic research, I decided to immerse
myself in the R&D strategy from the business point of view.
This is how I started my career at Zabala Innovation Consulting, and after
9 years of professional experience in this company, I have achieved in –
depth experience in managing challenging national and European projects
under the topics of Energy, Aeronautics, Aerospace, Automotive, Food,
etc. Nowadays, I am a senior consultant specialized in SME and FTI
programmes, participating in the preparation and reviewing of a
significant number of proposals and applying my experience as an
evaluator of the European Commission. I also lead the Exploitation
activities in European projects which allows me to evaluate, assess, define
and launch individual and joint marketing strategies of potential business
lines arising from European projects.
PhD Aránzazu Albístur

Who I am
I’m a R&D and Innovation Consultant for Zabala Innovation
Consulting in Mutilva, since 2018. I am responsible of SME
Instrument call and I work closely with SMEs and team
members to ensure a good match between ideas and funding
opportunities in product and service development.
I am graduated in Business Administration and Law by the
University of Navarra and during more than 3 years I have been
working as a consultant in different fields: Marketing, business
and currently Innovation.
I usually define myself as an entrepreneur, with strong abilities
to define business models and always looking forward to
identify new business opportunities.
Alberto Sierra
Innovation Consultant

@irsuseu
www.irsus.eu SME Instrument & Fast Track
to Innovation

What is SME Instrument?

The SME Instrument supports high-risk, high-potential small
and medium-sized enterprises to develop and bring to market
new products, services and business models that could drive
economic growth.
Accelerate
Companies,
No Projects.
OBJECTIVE
More than
€1.600 Millions
(2018-2020).
BUDGET
3 Different
phases.
PHASES
There are no
preset topics.
TOPICS
SME INSTRUMENTFor innovators with ground-breaking concepts that could shape new markets or disrupt existing ones in Europe and worldwide.
€

SME Instrument in numbers
From 2014 to 2018
3.553
PARTICIPANTS
€1.517M
ALLOCATED
3.551
COORDINATED
PROJECTS
8,4%
FUNDING RATE
(2018)

253 260
353
438
480
552
601
2014 2015 2016 2017 2018 2019 2020
BUDGET
(€ Millions)
INCREASE OF BUDGETARY ALLOCATION BY 137% IN JUST 6 YEARS€

Who can
apply?
What is a
SME?
<250 Staff ≤50M Turnover ≤43M Balance
Sheet Total
LINK: What is a SME (European Commission)

A typical SMEI company (PHASE I)
Analysis report on SME success factors and best practices (December 2017)
Receive an average grant of € 50,000.
The 98.9% is presented as the only partner.
The 91.4% are micro companies or SMEs with up to 49 employees.
It is relatively young (45.2% are Start-Ups).
52.7% have a small portfolio of products or services.

A typical SMEI company (PHASE II)
Analysis report on SME success factors and best practices (December 2017)
Receive an average grant of 1,35 M€
The 83.3% is presented as the only partner.
The 66.7% are micro companies with up to 10 employees.
It is relatively young (38.9% are Start-Ups).
77.8% have a medium-sized portfolio of products or
services.

HEALTH ICT
TRANSPORT &
CONSTRUCTION
ENERGY
RAW MATERIALS
AGRICULTURE
& FISHERIES
TOP FINANCIED TOPIC
in 2017

TOP FINANCIED TOPIC
in 2018
Despite the elimination of the topics,
health sector projects continue to be
the most benefited with 28% of
the budget (€94.28M).
28%
21%
13%
7%
7%
24%
HEALTH
ENGINEERING AND TECHNOLOGY
ICT
BIOTECHNOLOGY
ENERGY
OTHERS*
EIC SME Instrument data hub
*OTHERS: Food & Beverages, Security, Construction & Transport Networks, Consumer Products &
Services, Agriculture & Fisheries, Space, Cultural & Creative Economy, Eco-Innovation & Raw Materials,
Public Sector Innovation, Finance

SMEI phases & evaluation

SMEI Phases
Helps you get a grip on the R&D, technical
feasibility and commercial potential of a
ground-breaking, innovative idea and develop
it into a credible business plan for scaling it up.
Helps you develop your business concept
further into a market-ready product, service or
process aligned with your company's growth
strategy.
Helps you take advantage of additional EU
support extended via a range of business
support services offered on the EIC
Community Platform, open to SMEs benefiting
from the different EIC calls for proposals.
PHASE 1
Feasibility study
PHASE 2
From concept to
market
PHASE 3
Commercialisation
Lump Sum of 50.000€
From 0,5 to 2,5M€
6 Months
12 to 24 Months
No direct funding
IDEA
MARKET

Evaluation process
PHASE I
Proposal
Submission
Remote
Evaluation
Ranking of
Proposals
Invitation to
GAP
Below
Threshold
Not Proposed
for Funding
Proposal
Rejection
Above
Threshold
Proposed
for Funding
Responsibility: Applicants Experts H2020 Evaluation Team

Evaluation process
02
0301
Market size
Market access and risk
Competitive advantage
Clear and realistic commercialisation plans
Time to market
How the project will be managed
Team resources
Innovation Management Scheme
Work Packages, milestones…
Degree of innovation
New applied knowledge
Level of technical challenge
Technical achievability and risk
TRL
Evaluation
criteria
Market &
Commercialization
IMPACT (50%)
Quality and
efficiency of the
IMPLEMENTATION
(25%)
(25%)
EXCELLENCE
High Potential
Innovation beyond
the State of Art
Evaluation
Evaluation
criteria
Inspire the investor
to read on!
WEIGHTING: 50%
THRESHOLD: 4/5
WEIGHTING: 25%
THRESHOLD: 4/5
WEIGHTING: 25%
THRESHOLD: 4/5
Overall threshold: 13/15

Evaluation process
PHASE II
Proposal
Submission
Remote
Evaluation
Ranking of
Proposals
Invitation to
GAP
Below
Threshold
Not Proposed
for Funding
Proposal Rejection
Above
Threshold
Proposed
for Funding
Responsibility: Applicants Experts H2020 Evaluation Team
Invited for
Interview
Interview
Not Invited for
Interview

Evaluation process
PHASE II – THE INTERVIEW
12
11
633
14
11
EXPERTS FEB 2018
Business Angels Venture Capital Corporate
Entrepreneur Influencer Innovation Support
STEM

CUT OFF dates (2018-2020)
YEAR DEADLINE OF CUT-OFF
2018
PH I 08/02 03/05 05/09 07/11
PH II 10/01 14/03 23/05 10/10
2019
PH I 13/02 07/05 05/09 06/11
PH II 09/01 03/04 05/06 09/10
2020
PH I 12/02 06/05 02/09 04/11
PH II 08/01 18/03 19/05 07/10

What is Fast Track to
Innovation?

Industry is best-placed to ensure the
due commercial exploitation of the
innovation developed
Industry driven
Company growth and development in
order to strengthen Europe's industrial
leadership
High growth
Bottom-up
Market uptake of ground-breaking
innovations
Open to all types of participants
Funding to demonstrate and
validate your innovation
Close to Market
The time to initial market take-up should be
no more than 3 years from the start of your
FTI action.
Partners with complementary
backgrounds, knowledge and skills,
What is FTI?

What is FTI?
FTI in numbers
FTI Pilot (2015-2016) and FTI (2018-2020)
1994
proposals
€200M
ALLOCATED
<5%
FUNDING RATE
€300M
2018-2020

Ambitious and add substantial value to Europe (e.g. considerably contribute
to Europe's industrial leadership or the solution of Horizon 2020 societal
challenges)
ACTIVITIES – FROM
DEMO TO MARKET
Advanced and
specific research
and development
activities (TRL6
to TRL8)
Testing / piloting
/ demonstration
and validation
in real-working
conditions
Business
model
validation
Pre-normative
research and
standard-
setting
What is FTI?

2
3
Size: min. 3, max. 5 partners from, at least, 3
different EU Member States or countries
associated to Horizon 2020
Private companies. First-time industry
applicants and SMEs are particularly welcome
Universities, research and technology
organisations and further innovation actors
Cluster organisations, end-users, industrial
associations, incubators, investors, or the public
sector
4
What is FTI?
Who can
apply?
1

What is FTI?
A typical FTI
project
4-5 participants
3 countries
12-24 months duration
1-2 M€ EU contribution. Maximum up to EUR 3 million if duly
justified (70% of funding for private-for-profit entities, 100% for
non-profit)
€

FTI phases & evaluation

FTI Process
Important aspects in the preparation
phase:
Check Eligibility criteria
Read EIC Work Programme
Registration
in
Participant
Portal
Complete the
Proposal
submission
Forms and
Upload
Annexes
Submit
Proposal preparationProject
Idea
EvaluationApplication Signature of
CA
Signature of
GA

Application process
Important aspects to
bear in mind:
✓ Electronic submission: Participant Portal
✓ No negotiations in grant preparation phase (only high-quality
actions will be selected for funding)
✓ Financial viability check for coordinator only
✓ Pre-financing on a case-by-case basis (max. 90%)
✓ Limit of pages: 30

Evaluation process
01
0203
WEIGHTING: 50%
THRESHOLD: 4/5
WEIGHTING: 25%
THRESHOLD: 4/5
Evaluation
criteria
Quality and
efficiency of the
IMPLEMENTATION
EXCELLENCE
Innovation
IMPACT
Market &
Commercialisation
WEIGHTING: 25%
THRESHOLD: 4/5

Evaluation process
Further differentiation
Panel of 4 independent experts
(commercial and financial expertise).
Fully remote, no consensus meetings.
Value of 'Impact' criterion
Budget allocated to SMEs
Number of industry and first-time
industry applicants
Gender balance of consortium staff

KEY SECTIONS OF THE
PROPOSAL

Executive summary
SMEI
You have 2 minutes
to invest in your company
Who are you?
What is your
core-business?
How you do it?
What you
deliver?
Who you work
with?

Excellence
CHALLENGE & SOLUTION - SMEI PH I & II
Customer Pain Point → Business Need,
Technological Challenge or Market
Opportunity
What is your Innovation?
What is the market’s state-of-the-art?
How would your innovation compare with
available solutions, practices or products?

Excellence
APPROACH (1/2) SMEI
What is unique in your approach? (PH I & II)
Why now? (PH I & II)
What is the current development state of your innovation?
(PH I & II)
What do you plan to achieve in the feasibility study? (PH I)
What are the further stages and activities needed to
commercialize your innovation? (PH I & II)
6
7/8

Excellence
APPROACH (2/2) SMEI
Which milestones led to the current development stage?
(PH II)
Describe technological results obtained and economic
feasibility of the innovation (PH II)
What are the expected outcomes of the project and the
related success criteria? (PH II)

Excellence
OBJECTIVES - FTI
Specific Objectives (clear, measurable, realistic &
achievable) consistent with the expected exploitation &
impact
Explain the industrial/economic/social challenges and the
market opportunity you address

Excellence
RELATION TO THE WORK PROGRAMME - FTI
Explain why your proposal fit under the
section:
http://ec.europa.eu/research/participants/d
ata/ref/h2020/wp/2018-2020/main/h2020-
wp1820-eic_en.pdf

Excellence
CONCEPT & METHODOLOGY (1/2)- FTI
Explain the overall concept underpinning your proposal. Set
out your activities: demonstration, testing, prototyping, etc.
Specify the starting point and the level of maturity of your
proposal based on TRL scale:
http://ec.europa.eu/research/participants/data/ref/h2020/other/
wp/2018-2020/annexes/h2020-wp1820-annex-g-trl_en.pdf
Show the European/Global dimension and how it will added
value to Europe.
6
7/8

Excellence
CONCEPT & METHODOLOGY (2/2)- FTI
Explain how your proposal will lead to market take-
up and what will be required to achieve that.
Where relevant, describe how sex and/or gender
issues are taken into account.
(http://ec.europa.eu/research/participants/docs/h2020-
funding-guide/cross-cutting-issues/gender_en.htm)

Excellence
AMBITION - FTI
Describe your proposal’s innovation potential
Advance Beyond the State-of-the-art and
demonstrates that it is ambitious or a game-changer
You could refer to the break-through nature of the
objectives, the concepts, issues and problems to be
addressed, and the approaches and methods you will
use.
Compare with to products and services already
available on the market. Refer to the results of any
patent search carried out.

Impact
ENTERING THE MARKET - SMEI PH I & II
Targeted
Users and
Customers
Target
Market:
Type, Size
and Growth
Main direct &
indirect
Competitors
Barriers to
entry & Plan
to overcome
them

Impact
BUSINESS MODEL - SMEI
How does this innovation fit with your company’s overall
business strategy? (PH I & II)
What is your Value Chain and Key Stakeholders (PH I & II)
What will be your business model?, How do you plan to
commercialize (PH I)
Outline your business model with an approximate time-to-
market or deployment? (PH II)
Why is your model scalable? How do you intent to scale-up
and reach European/Global markets?
A Booster
for Growth

Impact
FINANCING - SMEI
Company’s Ownership and Capital Structure (PH I & II)
Expected Growth potential (Turnover, Profit, Jobs)
(PH I & II)
Estimated budget requirements to reach commercialization
(PH I & II)
What are your plan to ensure subsequent financing? (PH I)
How do you intent to finance 30% co-financing and outline
your plan to ensure subsequent financing? (PH II)

Impact
IPR & LEGAL FRAMEWOK - SMEI
Describe Legal & Regulatory requirements (PH I & II)
What are your IPR assets? (PH I & II)
Strategy for Knowledge management & protection
(PH I & II)
What are your measures to ensure commercial
exploitation – “freedom to operate”? (PH I & II)

Impact
COMMUNICATION - SMEI PH II ONLY
How you will publicly communicate about your
innovation during the grant period?
If relevant, how will you manage/exploit/share the
research data generated/collected?
If relevant, what are the measures to provide
open access

Impact
EXPECTED IMPACTS (1/2) - FTI
Expected
Impact of Work
Programme
Reshapes
existing or
creates new
markets
Boosting the
competitivene
ss and scale-
up of the
industrial
partners
Scientific +
Technological
progress
Achieving other
environmental
and social
impacts
YOUR
PROJECT
CONTRIBUTE
TO

Impact
EXPECTED IMPACTS (2/2) - FTI
Show which user needs or challenge you have identified and how
these will be met by your proposal
Describe the type of your target market, size and growth
Show the economic relevance of your solution, particularly in the
scale-up o the industry partners
Explain the ROI, with attention for the creation of growth and jobs
Elaborate your capital investment policy for the next 3 years
Identify the barriers/obstacles and any framework conditions for the
market acceptance

Impact
DISSEMINATION & EXPLOITATION - FTI
Draft “Plan for the dissemination & exploitation of the action’s results”
Explain which stakeholders should be involved in the last stretch towards
a successful commercial exploitation
Clarifies your commercial strategy and planned implementation via
partners of the consortium
Elaborate on the possible further development strategy for your
innovation to ensure your future competitiveness
Additional factors of relevance to boost dissemination & exploitation

Impact
IP & KNOWLEDGE PROTECTION - FTI
Industry Property Rights Assets → Key knowledge and who
owns them
Strategy for Knowledge management & protection
What are your measures to ensure commercial exploitation
– “freedom to operate”?
Explain Regulatory and Standard requirements
As relevant, research data management or open access

Impact
COMMUNICATION - FTI
Communication measurements for
promoting your work during the project
Clear KPIs in communication activities
Communication strategy tailored to the
audience

Implementation
TEAM - SMEI PH I & II
Describe your Team, their achievements and
experience
Explain the roles of the team within the project
If the project is to be implemented by a
consortium, describe how the partners
complement each other

Implementation
WORK PACKAGES & DELIVERABLES - SMEI + FTI
1 Work Package: Feasibility Study
1 Deliverable: Feasibility Report including a
Business Plan
Overall Structure of the Work Plan
Timing – Gantt Chart
Detailed Work Description
Milestones
Critical Risks & Mitigation Actions
PHASE 1
Feasibility study
PHASE 2 & FTI
From concept to
market

Implementation
RESOURCES - SMEI + FTI
1 budget table; no modification is possible
MAIN COST CATEGORIES
Personnel – Person Month Breakdown
Travel
Equipment (Depreciation)
Other Goods & Services
Subcontracting
Indirect Costs
PHASE 1
Feasibility study
PHASE 2 & FTI
From concept to market

Implementation
MANAGEMENT STRUCTURE AND PROCEDURES - FTI
Organizational structure and the decision-making
Explain why the organizational structure and
decision-making mechanism are appropriate to
the complexity of the project
Where relevant, how effective innovation
management will be addressed in the
management structure and work plan

Implementation
CONSORTIUM AS A WHOLE- FTI
Describe the consortium. How will it match the project’s objectives?. How do the
members complement one another. In what way does each of them contribute to the
action? How will they be able to work effectively together?
In what way does each of them contribute to the action? Show that each has a valid role,
and adequate resources in the action to fulfil that role
Describe the industrial/commercial involvement in the action to ensure exploitation of the
results and explain why this is consistent with and will help to achieve the specific
measures which are proposed for exploitation of the results of the action

Company
SMEI & FTI
No page limit
Not directly evaluated
Legal Entity & Main Tasks
CV/ Profile of the Team
Relevant Products/Services
Significant Infrastructure
Third Parties Involved

Ethics and Security
SMEI & FTI
No page limit
Not directly evaluated
National & Legal requirements accomplishment
Ethical issues related to research objectives
Ethical issues related to research methodology
Ethical issues related to potential impact of the research
Documents under national law
Security

Overall Tips & Most
common mistakes

Tips for success
Think you are writing to an investor!
First page = “Elevator-Pitch” - SMEI
The evaluators not only look for the project, they
are looking for COMPANIES.
The business over Technology.
EUROPEAN / INTERNATIONAL Dimension.
Do not forget to answer ALL the questions!
A picture is worth a thousand words!
Before submitting the proposal, review, review and be
reviewed.

Tips for success
Smart selection of key words. They will configure
the Evaluation Panel.
SMEI Phase I could be prepared by start-ups
companies but SMEI Phase II it is recommended
certain level as a company maturity.
SMEI: Demonstrate the high-growth and profitability
of your company comparing a scenario without
SME and a scenario with SME.
An existing or well defined Investment Structure is a
strong point.
Product and Services, revenue model and pricing
model are especially important in ICT projects.
Open Data and Standards are considered relevant.
Involvement of potential clients in demonstration
work packages and try to sign a good number of
Letter of support or commitment.
Strong IP strategy to ensure the commercialization.

Most common mistakes
Lack of information about competitors or existing
competing solutions.
Users and their needs are not adequately described,
nor customers and their willingness to pay.
Inaccurate market information, small market or not
sufficiently analysed.
The objectives and the plan of exploitation and
commercialization are ambiguous or not realistic.
The time necessary to reach the market is excessive.
It is not sufficiently explained how the product will be
exploited. The business model is not credible or viable.
Lack of coherence of financial projections.
Absence of LOI from customers, invertors…

Most common mistakes
Low innovation or non-disruptive in the proposed
environment. (PH II=> TRL6).
It does not sufficiently address the European global
challenges.
The time required for the planned developments is
inadequate.
The company does not have the necessary
capacities to carry out the planned work.
Missing business, marketing or commercial
development profiles that guarantee the arrival to the
market.
Inadequate justification of subcontracting. Does not
meet the criteria “Best Value for Money.”
The description of the risks and market barriers and
their mitigation plan, it is ambiguous or non-existent.
The proposal does not clearly demonstrate its ability to
access customers.

#InnovationWorks
Mónica de Juan
mdejuan@zabala.es
Leonardo Casado
LCASADO@zabala.es
Alberto Sierra
ASIERRA@zabala.es
Zabala Innovation Consulting
T (+32) 2 5138122
www.zabala.es
Twitter | LinkedIn

IRSUS training: SME Instrument & Fast Track to Innovation (September 2018)

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