When a healthy Small and medium-sized enterprise (SME) aims to develop a deep-tech product to global markets, it generally has two paths to choose from:
- It can take the faster, but riskier, road and aggressively look for venture capital (VC) investments to grow and speed up the product development and commercialization phases,
- or it can continue doing its normal, mature and profitable business and use the profit for the development work. However, unless you are in a very special market or your profit margin for very expensive products is exceptionally big or if you have somehow managed to create a mass market product, you will in any case need some outside support. If you are not willing to give any shares to external investors for whatever reason, the needed support for most of the European SMEs will come from the national funding agency (e.g, Business Finland) and/or from the various European Union funding instruments.
If a company wants to own its stocks, it will obviously opt for option B. On that path, both the domestic and European level funding sources are equally important for a growing SME. They have different rules and regulations, which the company must be aware of, when planning the long-term product development and commercialization strategies.
National funding agencies
Local funding sources are normally the primary source of funding at the beginning. In many cases, the instruments directed to early phase funding for start-ups are easy to use, the process is very light, and the yield is very high, meaning that the funding decision is often positive. Once the company grows and matures, it moves from these first-phase instruments to the next level instruments with more complicated processes.
These instruments normally require consortium-based joint proposals to tackle challenges or market opportunities having wider consequences for the relevant industry or even beyond that. Building a winning consortium is an art itself and smaller companies tend to trust the larger companies, research institutes or universities to do the heavy lifting. The budgets are bigger, the projects are longer, but the acceptance ratio is naturally lower. However, if a company’s expertise happens to be in an optimal position in respect to the prevailing preferences and trends, it is possible that it will be invited to several consortiums at the same time. As the national agency is legally responsible for the funding decisions, they do their best to evaluate how close the proposed objectives are to the center of the company’s technical road map and how big an effect a positive decision would have in securing high export-based revenues and the fast growth of the company.
Acknowledge the limitations
National funding agencies are governed by national and European level rules, regulations and laws and those need to be followed to the minor details. This will naturally have some consequences for those go-to companies, which are asked to several winning consortiums. Those companies will have, for a limited period, strong support from the agency. However, there are some strict rules dictating how much support a single company can get in respect to its own Research, Development and Innovation (RDI) investments. As a result, the company must start to say no even to perfectly fitting consortiums. Even when the project objectives would be perfectly fitted for the company’s road map and the company would be one of the best companies in the world for the case, with tens of years of experience (academy and company times combined) with some of the largest companies in the world. That leads to in-kind participation in these projects, which in turn means investing money and allocating unpaid personnel resources to be included in the loop.
European Union funding challenges
However, for a normal SME, which is struggling to continue with the expensive development of that game changing product, the situation will direct it towards EU level support, with much heavier consortium search and proposal writing activities. Additionally, the acceptance rate drops down, in some cases even down to few percentages, which means automatically that the overall yield is considerably lower and rejection letters from the European Union will turn into normal occurrences rather than being exceptions. There are no shortcuts here. You just must do your best to be included in the best consortiums, with the best group of partners and with objectives so close to your own roadmap, that it makes sense to invest resources for the preparation work – and if you are lucky for the actual work.
Autumn deadlines are just weeks away
As the summer holidays are starting here in the Nordics and soon also in the other parts of Europe, the preparations for several Horizon Europe calls with DLs in September/October are already in full speed. In most cases the consortium is fixed, and new members are not willingly invited to this last phase. However, there have been several instances when some partners have dropped out during this time. Likewise, when the proposal writing advances to a certain level, the responsible writers can detect that something is missing from the offer. It might be related to some EU rules, such as having the right balance in the consortium, being it about the type of partners (e.g., the ratio between SMEs, large companies, universities, research institutes and more), about some geographical issues or about something else. Or it might just be a realization of the need to have a particular world-class competence to enable, or to speed up, the implementation of the ambitious research agenda as a whole.
GIM Robotics ready for the last meter push
We have been lucky to be a well sought after partner for both domestic and European level consortiums. We have had our share of those rejection letters, but thankfully we have also been rewarded with several approvals. We have had several successful Business Finland (and some other national actors) funded projects together with some Finnish flagship companies especially in the field of mobile work machines and field and service robotics. During the last 12 months, we have been awarded with a project from Horizon Europe framework(not public yet), from EIT Digital, from Eureka/Eurostars, from NATO/DIANA and most recently from European Defence Fund (EDF). All of them required a considerable amount of work, but the more you do these things the better you become.
So, if you have a need for a stellar SME from Finland, with decades of experiences in sensor fusion, AI, probabilistic real-time 3D localisation and mapping, situational awareness, traversability analysis and whatnot else, with some serious companies, look no further.
Give us a call or send us a message. Let’s talk about how we can help you to make your consortium stronger.
