The short answer: use both, in the right order
European deep-tech founders should treat grants and venture capital as two tools with different jobs. A grant pays for technical risk and takes no shares. Venture capital pays for growth once the technology works. The strongest plans use a grant to reach a proof point, then raise equity from a stronger position.
Timing matters because the money in this sector is large and still uneven. European deep tech drew $20.3 billion of venture capital in 2025, a record 32% of all European VC, according to the 2026 European Deeptech Report from Lakestar, Walden Catalyst and Dealroom. The same report points to a persistent growth-stage funding gap and notes that more than 80% of exits come through M&A. Founders who rely on equity alone pay for every technical milestone with their own shares. Founders who rely on grants alone wait months for money that can only go to the project the funder approved.
Four numbers are worth knowing before you read on:
- €93.5 billion: the Horizon Europe budget for 2021 to 2027, including €5.4 billion from NextGenerationEU.
- 15.3%: the share of Horizon Europe proposals that won funding between April 2021 and July 2025, per the same Commission document.
- 6.6%: the share of full EIC Accelerator applications selected in the October 2025 cut-off. That is 61 of 923 companies, our calculation from two EIC announcements (applications, selections).
- About double: the effect of an early-stage grant on a young firm’s odds of raising venture capital later, found in a study in the American Economic Review of U.S. energy startups.
What counts as non-dilutive funding, and how big is the pool?
Non-dilutive funding is money you receive without giving up shares. Grants are the main form. You keep your cap table intact, you owe no repayment if you deliver the agreed work, and the funder takes no board seat. In return you accept rules: a defined project, milestones, reporting, and spending tied to that project.
The EU pool is large. Horizon Europe has €93.5 billion for 2021 to 2027. By July 2025 it had signed 29,453 grants with 18,008 distinct participants, and SMEs made up 35% of them. The European Innovation Council (EIC), the part of the programme built for deep-tech startups, earmarks 70% of its budget for SMEs. All of these figures come from the Commission’s own programme overview.
Founders usually meet three EU routes first:
| Route | What you get | Timeline from the official sources |
|---|---|---|
| EIC Accelerator | A lump-sum grant below €2.5 million for 24 months of work at TRL 6 to 8, equity of €1 million to €10 million, or both together | Short proposal feedback in 4 to 6 weeks. Full proposal results in 8 to 9 weeks. Jury results 2 to 3 weeks after the interview. An equity decision 2 to 6 months after that. |
| Other Horizon Europe calls | Grants for research and innovation projects | Evaluation takes up to 5 months. The grant agreement is generally signed within 3 months after that. |
| Seal of Excellence | No money by itself. A quality label for proposals the experts judged worth funding that missed out because the call budget ran out | Issued with the evaluation results |
TRL stands for technology readiness level, a 1 to 9 scale of how mature a technology is. The EIC Accelerator targets TRL 6 to 8, which runs from a prototype tested in a relevant environment to a complete, qualified system.
One rule shapes everything that follows. The EIC grant component is available only once during Horizon Europe 2021 to 2027. Founders get a single shot at it in this period, so the timing is a strategic call.
What are your real odds of winning an EU grant?
Lower than most pitch decks assume, and the number depends on which door you knock on.
Across Horizon Europe, 15.3% of proposals won funding between April 2021 and July 2025. A second count points the same way. AllGrants, the matching tool we cover below, looked at closed Horizon Europe calls in the same topic areas as today’s open calls and found 12,750 funded out of 82,794 proposals, about 15%, using call notices and CORDIS data. The rate moves by call and by year, so treat 15% as a baseline and not a promise.
The EIC Accelerator is tougher. The EIC’s own announcements give enough to calculate a rate. For the cut-off on 1 October 2025, we matched the application count to the results by timing: the jury met from 19 to 23 January 2026 and the selections came out in February.
| Stage, October 2025 cut-off | Companies | Share of applicants |
|---|---|---|
| Full applications received | 923 | 100% |
| Reached the jury interview | 121 | 13% |
| Selected for support | 61 | 6.6% |
The 923 figure and the almost €7 billion those companies asked for come from the EIC’s October 2025 announcement. The 121 and 61 come from the February 2026 results. The June 2026 round followed the same shape: 87 companies reached the interview and 38 were selected.
Two details change how you should read those numbers. First, the final stage is a pitch to an investor and business-expert jury. You are not only passing a science review. You are answering the questions an investor asks, and a team that can’t do that will struggle here. Second, a strong score does not guarantee money. The June 2026 round also gave 95 further proposals a Seal of Excellence because they cleared the quality bar but the budget ran out.
The practical read: treat Horizon Europe as roughly a 1 in 7 bet and the EIC Accelerator as roughly a 1 in 15 bet. Never build a runway that depends on winning either.
How does EIC blended finance work?
Blended finance puts a grant and an equity investment in one package. The EIC Accelerator offers three modes.
| Mode | What you receive | Who can use it |
|---|---|---|
| Grant only | A lump sum below €2.5 million for innovation work at TRL 6 to 8, completed within 24 months | Start-ups and SMEs, including UK applicants, who can only use this mode |
| Investment only | Equity or quasi-equity, such as a convertible loan, of €1 million to €10 million. Larger amounts run through STEP ScaleUP | Start-ups, SMEs and small mid-caps with up to 499 employees |
| Blended | The grant plus the investment | Start-ups and SMEs |
Blended applicants can negotiate an increase of up to €2 million at the final step. After selection, the EIC Fund runs its own due diligence and decides on the investment within 2 to 6 months. For a plain-language walkthrough of the application steps, the AllGrants guide to the EIC Accelerator is a good place to start.
Founders want the blended package. In the October 2025 cut-off, 683 of 923 applicants (74%) asked for a grant combined with equity. The winners look the same: 85% of the February 2026 beneficiaries and 84% of the June 2026 group receive blended finance.
The package is mostly equity. For the 38 companies selected in June 2026, the EIC proposed €90 million in grants and provisioned €202 million for potential equity investments. Equity is about 69% of that €292 million. The equity is provisioned and not guaranteed, because the investment decision follows due diligence.
That has a plain consequence. A founder who applies to the EIC “for the grant” is mostly applying to a publicly backed venture investor.
The EIC’s track record helps explain why investors pay attention. Its 2026 Impact Report says EIC-backed companies have raised €15.5 billion, including €5 billion from private co-investors, with more than 1,000 investors alongside it. It also counts twelve equity rounds above €100 million and three deep-tech unicorns created in the past year.
These numbers show scale, not cause. The EIC picks promising companies, so some of that capital would have arrived anyway.
How does a grant change your next venture round?
The best evidence comes from the United States. Economist Sabrina Howell studied applicants to the Department of Energy’s SBIR grant programme and compared firms ranked close to the funding cutoff. Her result, published in the American Economic Review in 2017, is that an early-stage award approximately doubles the probability that a firm later receives venture capital. The effect was larger for firms facing tighter financial constraints. The benefit also seems to come from paying for prototype work, not from the award acting as a badge of quality.
Don’t expect the same effect from an EIC grant. The programme, sector and continent differ, but the mechanism should carry over. The grant pays for the technical proof, and investors fund companies that have that proof.
The cap table shows the effect in plain arithmetic. Take hypothetical numbers: you need €3 million to reach a pilot, and investors value your company at €12 million before the round.
| Funding mix | Equity raised | Pre-money valuation | Stake sold |
|---|---|---|---|
| All equity | €3 million | €12 million | 20.0% |
| €2 million grant plus equity | €1 million | €12 million | 7.7% |
The figures are illustrative and ignore timing and any equity that comes with the grant. Same milestone, but you keep 12.3 more points of the company.
A grant also changes what investors see. At the EIC, four remote evaluators read the short proposal. Full proposals go to a technology expert and a panel of at least three experts, and the best reach a jury of investors and business experts. By the time you win, outsiders have already tested your technology, team and market with questions much like the ones we ask in due diligence.
The costs are real. Evaluation for Horizon Europe grants can take up to five months, and signing generally follows within three more. The grant also locks you into a work plan: the EIC grant covers 24 months of defined innovation work. And if you choose blended finance, the EIC Fund becomes a new shareholder, so tell your existing investors early.
Which should you pick at each stage?
Our rule of thumb is to match the money to the risk you are buying down. The table below is our view, not a formula, and the stage boundaries blur in practice.
| Stage | Main risk | Lead with | Add when ready | Watch out for |
|---|---|---|---|---|
| Pre-seed, lab to prototype | Does the technology work? | Grants from national, regional or Horizon Europe research calls | Small equity from angels or a pre-seed fund | Grants pay only for the agreed project, and Horizon Europe evaluation alone can take up to 5 months |
| Seed, prototype to pilot | Will a customer use it? | Equity from specialist deep-tech investors | A grant for the next technical milestone | The EIC Accelerator expects TRL 6 to 8, so test your readiness before you write a word |
| Series A, pilot to scale | Can it sell and scale? | EIC blended finance or a venture round | A Seal of Excellence as a route to other funders if the EIC says no | You get one EIC grant in this programme period, so spend it on the biggest milestone |
| Growth, scale-up | Can you afford to grow fast? | Venture capital, plus STEP ScaleUP for larger EIC investments | Targeted R&D grants | The growth-stage funding gap that the Dealroom report describes |
Three rules sit behind that table.
- Apply before you need the money. With evaluation of up to five months and signing within three more, a Horizon Europe grant is not a plan for a runway shorter than a year.
- Brief your lead investor before you submit. The EIC grant commits you to 24 months of defined work, and a blended deal adds a new shareholder.
- Run an equity track in parallel. A Seal of Excellence is a label, not cash. Only 61 of 923 companies were selected in the October 2025 cut-off, so raise as if you will lose.
How do you find the right call without reading 1,400 of them?
Finding calls is easy. Knowing which ones you can win is the hard part. As of 20 October 2026, AllGrants lists 1,432 open EU and national grant calls, with new ones added every night. Of those, 381 sit under Horizon Europe and only 9 under the EIC. Reading each one against your company would take weeks.
AllGrants is a free tool from Dealflow Labs, which sits in the same group as Ventures.eu. You enter your company website, and it checks every open call at the readiness level you choose. It shows where you would be competitive, not only eligible. It needs no account and no card. The grant data comes from the EU Funding & Tenders Portal, CORDIS and national funding agencies, and the service is independent and not endorsed by the European Commission.
Use it to build the shortlist that the stage table above calls for. The Horizon Europe for startups guide covers the calls beyond the EIC, and you can browse every open call without signing up.
Frequently asked questions
Can a startup get a grant and venture capital?
Yes. The EIC Accelerator itself pairs a grant with equity, and the EIC’s 2026 Impact Report counts more than 1,000 investors co-investing alongside it. Tell your existing investors before you apply, because blended finance adds the EIC Fund as a shareholder.
What is the EIC Accelerator success rate?
In the October 2025 cut-off, 61 of 923 full applicants were selected, about 6.6%. That is our calculation from the EIC’s application and results announcements. Across all of Horizon Europe, 15.3% of proposals won funding between April 2021 and July 2025.
Does winning a grant help you raise venture capital?
The best evidence says yes. A study in the American Economic Review found that an early-stage award approximately doubles the probability of later venture capital for U.S. energy startups. The effect seems to come from paying for prototype work. European data shows scale, not cause: EIC-backed companies have raised €15.5 billion, but the EIC also picks strong companies to begin with.
What if you score well but don’t get funded?
You may receive a Seal of Excellence, a quality label for proposals that experts judged worth funding when the call budget ran out. It carries no money. With your consent, the EIC’s executive agency can share your contact details with other funders. The June 2026 round gave out 95 of them.
Sources
Every page below was opened and read on 20 October 2026.
- Horizon Europe: investing to shape our future, European Commission. Used for the budget, signed grants, success rate, SME share and the EIC’s SME earmark.
- EIC Accelerator, European Innovation Council. Used for funding amounts, TRL range, eligibility and application timelines.
- Strong interest in EIC Accelerator funding with 923 companies applying, EIC, 17 October 2025. Used for application counts, the requested budget and the 74% blended share.
- 61 start-ups and SMEs secure EIC support, EIC, 17 February 2026. Used for the 121 interviews, 61 selections and 85% blended share.
- 38 start-ups and SMEs secure EIC support, EIC, 15 June 2026. Used for the 87 interviews, 38 selections, the €90 million and €202 million split, the 84% blended share and the 95 Seals of Excellence.
- Seals of Excellence, EIC. Used for what the label is and does.
- EIC Impact Report 2026, EIC, 4 June 2026. Used for the capital raised, co-investment and large rounds.
- Horizon Europe: how to apply, European Research Executive Agency. Used for evaluation and signing times.
- Financing Innovation: Evidence from R&D Grants, Sabrina T. Howell, American Economic Review, April 2017. Used for the effect of early-stage grants on later venture capital.
- The 2026 European Deeptech Report, as reported by Tech.eu, 24 March 2026. Used for deep-tech venture capital totals and the growth-stage gap.
- AllGrants and its FAQ, Dealflow Labs. Used for open-call counts, the tool description and the closed-call win-rate count.
Our own calculations, all from the figures above: the 6.6% and 13% EIC rates, the 69% equity share, the 1 in 7 and 1 in 15 odds, and the cap-table example.
