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Why the SME Accelerator is the best EU programme and why we love it

Accelerator SME Best

Most EU programmes are complex, somewhat detached from reality and make you twist your true nature to be able to fit in.

This is not the case with Accelerator. It has been designed and run by real practicing serial entrepreneurs and VC professionals for real start-ups and their promoters. Here are the 7 main reasons why we recommend and support the programme.

1.      It has 7+ years of experience and its approval criteria have evolved since and has become concrete and truly objective.

The programme has been launched 8 years ago and we are now at the end of its first programme period with only one application date remaining. Throughout its running time, the SME innovation support has undergone a huge transformation which has brought it closer to market practices and has made it more objective. The process is very similar to what happens in the private world of capital raising and all of the documents or steps are familiar to practitioners and not at odds with market logic. Benefin is a Corporate Finance and Advisory practice with origins in Investment Banking. We definitely feel comfortable with the Accelerator process and easily switch to and from private placement capital raising exercises.

2.      The application process is useful for the start-up and its supporters and funders as it gives them a structured perspective on their undertaking

Innovative project promoters tend to be hyped by their idea and invention and often neglect market logic. The application process for Accelerator forces the start-up SME to put the project within a frame that tests its overall feasibility, viability and long-term sustainability. In effect, the programme subjects the applicant to a rigorous checklist that covers all the aspects that a VC will explore before deciding whether to invest in an opportunity. When originating and structuring deals we often come across people that are so hyped that they forget the market logic. At Benefin we find ourselves often having to bring people down to earth without destroying their energy and enthusiasm. So does the Accelerator framework.

3.      The programme does not clash with private sources of support and funding

The application process not only does not place restrictions but encourages the use of mixed funding sources. The business plan, the project planning and execution, the financial model and investor pitching are exact one-to-one analogues to the tools used in the world of private VC funding. The logic is the same and a project that has all the merits to score high on the Accelerator programme also has high chances of succeeding with private sources of funding. We have had numerous cases where projects applying for Accelerator funding raise cash from private sources on the back of the same document pack whilst waiting for programme jury assessment.

4.      The requirements are less formal and more about the essence

Compared to other EU programmes the requirements mimic the selection criteria in the private world. They emphasise on essence. The load of formal requirements is minimal. The fulfillment proofs are liberal. All in all the programme does not poison the true nature and culture of a start up but enhances it and encourages it. The evaluation focuses on the overall business and market logic of the application and the fit and agreement between all the elements of the application. This is in line with VC investment logic, where the overall fit is more important than single elements of a value added proposition. Benefin also put the overall balance and optimal proportions first.

5.      The emphasis is put on market as arbiter and not on ingenuity of technology or innovation

The leading driver is the market itself and its successful penetration. At the end of the day the Accelerator programme targets supporting of market-viable high-risk high-impact solutions to significant problems that customers are willing to pay for. The VC focus and emphasis is on the same. Cash is the ultimate source of life and cause for death and once funding runs out this depends on the market success. Hence the logic of the Accelerator programme is to put virtually no weight on frontier technology but on execution and likelihood for market success. Expected revenue and operating margins are the two single most important drivers of value for any investment that we assess regardless of whether it is for Accelerator programme of private world capital budgeting decision.

6.      All the outputs from the application process are 100% applicable for other business use such as funding application or execution or business development

Preparing a really serious application for the Accelerator programme is challenging and requires a lot of time, resources and involves costs. People often ask themselves whether it is worth it. One should keep in mind however that applying for funding and selling one’s entrepreneurial idea requires similar effort and costs. It also goes through a very similar process. The reality is that one has to do it, whether or not applying to the Accelerator programme. The output if done properly is a very strong set of documents and idea development that will surely find use and even more so monetized use.

7.      The programme allows for multiple attempts with or without proposal enhancement

Similarly to the private funding world, this programme allows one to fake it until she makes it. And there is no punishment for failed attempts. One either wins or learns and there is no loss involved in the process if done properly. At Benefin we help to ensure exactly that.

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