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Government guarantee means now is a great time to apply for Horizon 2020 funding

Thousands of British organisations will be pleased to learn that the government has confirmed it will guarantee to fulfil funds due on any Horizon 2020 grants won before the UK leaves the European Union.

This statement will provide a degree of reassurance to businesses at what has become a very uncertain time for the UK economic landscape. Following the announcement of the referendum results many businesses have been reluctant to embark on European funding bids as it was unclear how they would be effected once the exit process began. For this reason, applications from UK companies are likely to have fallen giving the latest applicants the best chance of making the cut.

This commitment gives businesses the opportunity to continue accessing this valuable resource for research and innovation funding. It is particularly good news for small companies who can apply for SME instrument grant of up to €2.5million for early stage proof of concept through to bringing products to market. We encourage all tech companies to take advantage of this opportunity while it is still accessible and would be happy to chat to anyone wanting to know more information about the opportunities available. Get in touch with us at grants@tenshi.co.uk

Some interesting stats from the EU prior to H2020

We often get asked about the success rates and number of companies that get funding from the EU grant programs such as Horizon 2020. The EU has recently released some interesting statistics regarding their previous programme FP7.

European funding prior to Horizon 2020 was done in a series of framework programmes, starting in 1984 with a budget of just 3.8 billion euros to spend over 5 years. The framework programmes grew steadily from then on with the biggest increases coming in FP7 (07–13) where available funding grew to over 50 billion euros.

Horizon 2020 took the reins from 2013 onwards with a new structure and a further 80+ billion euro budget.

During FP7, Germany and the UK got by far the most funding, but funding was provided to a broad range of companies with 134k people participating in the programme from 170 countries. Statistics also show a good gender balance, 38% of project participants were female. Of the 136k eligible applications, 18% received funding, resulting in twenty-five thousand supported businesses.

A second statistic released was €6.4 billion in funding going to SME’s via the still active Eurostars programme.

Eurostars has been running since 2007 and was developed to meet the specific needs of SMEs. It was the first European funding and support programme to be specifically dedicated to niche market of research-performing SMEs in their innovative R&D projects. Eurostars is a joint programme between EUREKA and the European Commission.

 

 

Horizon 2020 2016-17 Programme Announced

This week the second work programme of Horizon 2020 has been announced, which details the grants that are available through 2016-2017.

As with the 2014-15 work programme, the ‘Open Disruptive Innovation’ topic is the most likely avenue for games/digital/creative companies to apply through, as this has a broad scope.

Full details on the 2016-2017 SME instrument (section of H2020 relevant to SMEs) are available here.

Budget

 The ‘Open Disruptive Innovation’ topic has €126m allocated for the next two years. This topic has the largest budget allocated to it, from the total €739m available for the SME Instrument in 2016-17.

Submission dates

Phase 1:

24 Feb 2016

03 May 2016

07 Sep 2016

09 Nov 2016

15 Feb 2017

03 May 2017

Phase 2:

03 Feb 2016

14 Apr 2016

15 Jun 2016

13 Oct 2016

18 Jan 2017

06 Apr 2017

01 Jun 2017

18 Oct 2017

Projects Funded to date

Horizon 2020 has released details of all grants awarded to date, include the company and amount of funding awarded. Under the ‘Open Disruptive Innovation’ topic, which is where most digital/creative/games companies would look to apply, there have been 210 grants awarded in 2014-2015. Of these, 171 were phase 1 €50k feasibility study grants, and the remaining 39 were phase 2 innovation projects (€500k-€2.5m).

Some of the projects include:

‘Advanced Back end of a Service Engine’

A framework providing back end functionality for mobile app developers. More details here.

This Phase 1 grant (€50k) was awarded to Italian company Apps Builder in September 2014.

‘Big Data using Second Screen and Content Recognition’

A tool to help TV broadcasters to gather data on their users and personalise the experience accordingly. More details here.

This Phase 1 grant (€50k) was awarded to Spanish company Bridge Mediatech in December 2014.

‘Automatic creation of interactive video to double video advertising revenues whilst decreasing inconvenience for viewers‘

A solution that creates interactive video to enhance advertising monetisation. More details here.

This Phase 2 grant (€946k) was awarded to French company Adways in October 2014

Platform Universal Self Hosting, a hybrid-cloud Platform as a Service reducing web application development cost by 40% for SMEs ‘PLUSH’

Next generation self-hosted Platform as a Service, which can run multiple applications, in multiple languages using multiple data backends on a hybrid-cloud infrastructure.

This Phase 2 grant (€1.9m) was awarded to French company Commerce Guys in October 2014.

Full listing of all grants awarded is available here.

 

 

Tips on Horizon 2020 Funding

This post summarises the key things that you need to be aware of when considering applying to Horizon 2020.

‘SME Instrument – Open Disruptive Scheme’ is the section of Horizon 2020 relevant to smaller companies in creative industries

Most of Horizon 2020 is not suitable for SMEs (small to medium size businesses), but the ‘SME Instrument’ section is specifically there to provide funding to smaller businesses. Within SME Instrument is the ‘Open Disruptive Scheme’ which is relevant for creative businesses.

How much money do they have?

Horizon 2020 as a whole has huge amount of funding.

For the SME Instrument – Open Disruptive Scheme specifically in 2015 they planned to fund 90 phase 1 projects (up to €50k) in 2015 and up to 26 phase 2 projects (up to €2.5million).

When does the fund end?

The fund runs until 2020 (started 2014) but they announce details including themes and submission dates in 2 year sections.

How much money can I apply for?

There are 3 phases you can apply for:

Phase 1 – feasibility study, €50k (70% match funding)

Phase 2 – Innovation project, between €500k-€2.5m (70% match funding)

Phase 2 – Commercialisation & Coaching, no funding, provides support to projects funded through Phase 2

What Phase should I apply for?

It depends on your project, however there is a very strong link between companies who undertake a Phase 1 before applying for Phase 2. The success rate of companies applying straight for Phase 2 is very low.

How long should my project be?

Phase 1 – usually around 6-9 months

Phase 2 – 1-2 years

Phase 3 – On-going

You need to have the potential to grow to a very large company on a global scale

They are looking for companies who could provide benefit to the European Union, so you have to have plans that include scaling significantly.

You have to be doing something genuinely innovative

There has to be something new, for example a new technology, in what you are doing.

You need a solid business plan that focuses on the EU

You must be market ready, so need a solid business plan. Phase 1 is designed to fund you to develop this, so that going into Phase 2 you have it ready. Horizon 2020 is an EU program so your plan must focus on the EU, not just the UK.

You have to already have proven that your idea works

You need to have already developed the project to a point where it works.

You need customers

You need to be able to show strong demonstrable market interest, which ideally means having customers already.

What is match-funding and how does it work?

Most grants, including InnovateUK SMART and Horizon 2020 grants are ‘match funded’.

This means that they will pay a percentage of your overall project costs.

In the case of SMART, InnovateUK will provide either 60% or 45% of the total project cost, depending on the level of funding you apply for.

For Horizon 2020 however, they will match 70% of your total project cost.

The rest of the project costs will have to covered from another source. This could be from:

  1. money you already have in your company bank account
  2. cashflow from existing revenue streams
  3. private investment
  4. other grant funds
  5. ‘in-kind’ contributions such as equipment, materials, unpaid work based on time spent

Depending on the grant, you may be limited as to where this money can come from. For example, some grants cannot be matched against other grants. Many grants also do not allow certain kinds of (or any) ‘in-kind contributions’, and most grant funds require a least a significant amount of the funding to come in actual cash rather than in-kind contributions.

In the case of InnovateUK SMART grants, in-kind contributions are not accepted. Horizon 2020 however does allow some in-kind contributions to be included.

Also dependant on the grant fund is whether you need to have your match funding already confirmed before you apply for the grant. In some cases, you can apply for the grant and use your success in that to raise the match funding (although in those cases you wouldn’t actually receive any of the grant money until you had raised the match funding). In other cases you need to have the match funding already in place (or confirmed on the condition of you receiving the grant).

With InnovateUK SMART grants you can apply without your funding confirmed, although at least some progress on knowing where that funding is coming from is recommended. With Horizon 2020 you should plan to have the funding in place before you apply.

If you would like to discuss match funding, or grants in general, please get in touch.

InnovateUK SMART Grant Submissions to Pause after January 2016

SMART Grant applications are usually every 2 months, however due to the budget announcemeqnt, InnovateUK has cancelled their March submission deadline.

This means that currently 21st January 2016 is the last confirmed SMART Grant submission date.

It is unknown as yet how SMART grants (and other InnovateUK funds) will change, but we hope to know more in early 2016.

We recommend that any company wishing to apply for a SMART Grant does so in January 2016.

 Get in touch before 6th January to discuss your application.

The differences between Proof of Concept and Development of Prototype duringa SMART application

There are three types InnovateUK SMART grants you can apply for. The smallest (up to £25k) is for Proof of Market, and then you have Proof of Concept (up to £100K) and Development of Prototype (up to £250k).

One of the common challenges is understanding the difference between what is required for Proof of Concept vs Development of Prototype. This post breaks down the key differences based on our experience…

Proof of Concept

For a Proof of Concept you should:

  1. Have theorised a technology solution to a problem.
  2. Have reasonable basis (i.e. data) that there is market opportunity (which may or may not have been found through a Proof of Market grant)
  3. Be ready to test your theory by building something that is only advanced enough to prove the concept can work.

Development of Prototype

For a Development of Prototype you should:

  1. Have proven the concept already.
  2. Now be ready for a more advanced demonstrator that is somewhat representative of what your full commercial offering may be, in order to test the market.

Some examples:

  1. You are looking to build software that compresses data 10% better than the current best in market.
    1. Your Proof of Concept will be to create the software that compresses the data, but with no user friendly UI.
    2. Your Development of Prototype will be throw-away code, but have a decent UI and some other features such as ability to upload a file.
  1. You are looking to build a new car that is more aerodynamic that any currently on the market.
    1. Your Proof of Concept might be made out of solid clay, designed to see if it is aerodynamic and whether people like how it looks.
    2. Your Development of Prototype will be a prototype of the actual car, used to find the best manufacturing techniques and test how it drives, but will be scrapped afterwards.

Therefore, both projects involve roughly the same people and skills, and both require engineering. However a Proof of Concept is about creating some software to answer ‘is it even possible to solve my problem that way?’, whereas a Development of Prototype involved building software to test, to validate the market fit and work out how to go about building the full commercial product afterwards.

 

Public grants: What are technology innovation grants?

Public grants are a popular route for companies to get funding to develop products or services. Development of own IP can sometimes be challenging to fund, particularly during the early stages before you can prove the potential of your idea. Public grants are often the best way to find that early stage funding.

An important consideration when applying for a public grant should be that grant funds have a greater reason for existing than just to benefit your company. Often that purpose is to generate economic growth either through job creation, or through technology innovation.

This article is going to look at technology innovation grants, and what types of projects they are designed for.

Grants for technology innovation can often be substantial amounts of money, sometimes up to £100k, but often higher up to £250k and in some cases into the millions. In the UK, these grants are mainly available through InnovateUK (innovateuk.gov.uk) (Technology Strategy Board) and the EU Horizon 2020 program (ec.europa.eu/programmes/horizon2020).

So, what is technology innovation and how does it apply to games?

Technology innovation is defined as the research and development of new or improved technology, developed for widespread use. What this means in practice is that:You need to be developing technology, not a game and not content.

Some examples of what this might be are a new game engine, a Unity plugin that you will sell on the asset store, a specific algorithm, or a standalone tool for part of the production pipeline, for example animation or lighting.

You can develop this technology as part of a bigger project.

For example, you may develop the tool during the production of your game as part of the process. In fact, this is a good thing because the game enables you to prototype and proves that the technology works. The funding is only available however to cover the time spent on technology development, but if part of that is developing a prototype game to prove it, you may be able to get some funding for part of that too.

The technology you are developing does not exist.

You cannot recreate something that already exists. Whatever you are doing must be new, or a significant step forward based on some existing technology.

It must be something that will benefit your industry (or others) as a whole and not just your company.

So you must be intending to, and demonstrate commercial potential, to be able to sell this technology to other companies, to help them as well as help yourself. What this means is that if you are developing something that you only plan to use in-house, to make your games better than your competitors, you will not be able to get technology innovation funding because you are not creating something that can have widespread use.

You need to be developing the technology innovation yourself.

Essentially, you cannot be outsourcing or contracting the development of the technology. You need to show that you have the skills in-house to create the technology; otherwise, it will be perceived that it’s not your team that should be getting the funding, as you are not the ones with the skills to create it.

You should be able to demonstrate why this technology is relevant right now.

Being able to show that there is a need for this technology in your target industry right now is crucial. This usually means that there is a step change in your industry that gives your technology significant potential value, or a problem that your industry has been struggling with for a long time.

There must be significant technical uncertainty that you can deliver the project.

This is the complete opposite of most types of funding, but if you know exactly how you are going to developing the technology and it is just a matter of doing it, then you will not be eligible for technology innovation funding. There needs to be a significant element of research & development, with key risks that may stop you from succeeding. You must have a plan to mitigate those risks, but those risks and unknowns must exist.

Many technology innovation grants are not about getting to market, they are about proving the technology.

This does not apply to all technology innovation funding, however many including InnovateUK Smart Grants (one of the most popular grants for technology innovation) are specifically not funding you to get your technology to market. They are funding the R&D of the technology, after which you can then look to turn it into a full product to take to market.

If your project does have technology innovation, then you should consider applying for grant funding from InnovateUK or Horizon 2020, although be aware that there are other criteria to meet, such as being able to cashflow the project, being able to match fund and proving that you have the team in place to effectively project manage the process.

If you are looking to raise grant funding for technology innovation projects, then you can either write the grant application yourself, or work with a company such as Tenshi Grants who will write the application for you.

Technology innovation grants are not suitable for everyone, many games companies now use 3rd party technologies such as game engines or tools to enable them to focus on building games and content as efficiently as possible. However, some companies focus on building technology and others find that they come across a problem that cannot be solved with existing technology so have to build it themselves. In those scenarios, you are potentially eligible for significant grant funding and should be consider this as a way to fund your company growth.

SMART – A Closer Look

SMART grants are one of the grants available from Innovate UK (Technology Strategy Board) that provides public funding to small and medium sized enterprises (SME’s) that are looking to use technology, science and engineering to push borders and redefine boundaries. Previously known as the Grant for Research and Development scheme, it was designed to do just that, encouraging companies to engage in R&D projects, from which valuable new products, processes and services could be created to contribute to growth of the UK economy.

Technical innovation
Your project must involve technical innovation. That means it is a leap-forward over the current state of the art.

Commercial innovation
Your project must have commercial innovation. That means it must have the potential to change the way that businesses in your sector operate.

Is it risky?
Is your project technically risky? It should be. InnovateUK expect that SMART projects involve technical risk and that they may well fail. If you have a ‘sure bet’ then look for other funding sources.

Of greater benefit    
Will your project help companies other than your own? SMART funding exists to help the UK companies, not simply to benefit you and your business.

For the future
Does your technology have the potential to deliver social, economic and/or environmental benefits? Does it cut carbon emissions, help disadvantaged people in society or help reduce waste for example?

Money
Most of your team need to be direct employees on a PAYE scheme, not contracted. Likewise, director’s dividends do not count as allowable staff costs.

Risky R&D only
Do not aim to take your product/service to market with these grants; they are intended for early stage, risky R&D. InnovateUK would expect that you will fund follow-on product/tech development and market entry with other sources of funding after your SMART project has completed.

SMART support
If you can fund this yourself, do not apply, SMART grants are intended to help fill a funding gap and you must to be able to show that the project would not be undertaken as well or at all without SMART support.

Cashflow
Do not expect to cash flow your business with a SMART grant, it is matched – meaning that you need to find 40-55% of the project costs yourself – and the grant is paid every 3 months after you incur the costs.

Costs
Don’t include any sales, marketing or business development costs. These are not allowable.

Milestones
Be prepared to provide project plans, updates, milestone reports, proof of deliverables and cost claims on a regular basis. Make sure they are accurate otherwise your grant will be delayed.

The SMART scheme has already been of huge help too many UK companies and with funding rounds announced until March 2016 and a further batch planned, will continue to help SMEs to fund R&D projects.

If your company is in the business of “pushing the envelope”, Tenshi Grants can make the application process simple and cost effective for your SME, by helping you to write your application to ensure you meet all the criteria and present your project as effectively as possible. Contact us to talk about SMART grants.

Public Funding – Access Hints & Tips

We are fortunate to have quite a lot of public funding available to the games, digital and creative sectors in the UK. Accessing this money however can take a lot of time and effort; most public funding has certain requirements you need to fulfil, such a job creation  or innovation.  Our funding team has put together a list of tips to try to help you navigate the public funding landscape.

Understand why the grant exists

All public grants have a reason for existing and it is not to make profits. They always have a remit of some kind – the key is to understand what that remit is. Many regional grants are about creating or safeguarding jobs, so they will require you to commit to numbers of jobs you will create. Others are about making the UK more competitive in some way, e.g. innovation. Make sure you address this in your application and that your project genuinely fits their goals. Do your research; understand why the funding exists and who the organization is that administers it.

Understanding the application process

Take the time to understand the application and assessment process. It is your job to adhere to this. Do not expect the assessors to make a leap of faith if you have not properly responded to every question. Check, check and check again!

Make sure the grant is suitable

Understand whether the funding is best suited to single companies or consortiums. For example, InnovateUK SMART funding is for a single applicant that has all the necessary skills and experience at hand whereas many EU funding schemes are geared towards multinational consortiums that complement each other’s capabilities.

Make sure you are eligible for it

Understand the eligibility criteria. You do not want to spend days or weeks writing an application you are not eligible for because of geographical, sector or other reasons.

Be prepared to manage the project and admin

Public money often takes time to raise, can be a minefield and can be admin heavy. Make sure you prepare for this and have someone who is willing and able to handle the project management and administration.

Do not apply for a grant to cashflow your business

Public money is often not suitable to help cashflow a project. Almost all public money is match funded meaning that you need other sources of funding in place (e.g. angel investment, VC, loans, debt). It is often paid in arrears (you incur the costs and claim some of it back afterwards).

Understand the people who will be assessing your application

Don’t assume that the people you are applying to know your industry or market. Avoid industry-specific jargon and acronyms.

Use the right type of language

Do not use overcomplicated or flowery language. Whilst you should aim to use the entirety of the space available (many grant applications have fixed character limits) do not pad for sake of it. Assessors will spot superfluous text and your core message gets diluted.
Back up all your facts
Evidence any facts, figures and assertions with quotes and references to credible and recent sources. If your market is “growing rapidly” then you need to quantify that (e.g. “10% per annum over last 5 years”) and then evidence that with a credible source such as a trade association or government economic report.

Use a positive tone and be credible

Use a confident and positive tone (“we will enter the market in X”) but do not over-promise (“we will gain 50% market share in 3 months”)…assessors won’t believe you.

Be responsible

Remember that public funding comes from taxpayer sources. The funding body has a duty to protect the public purse. You have a responsibility to use the funds in the way that you said you would. Failing to do that will likely end up in you being required to repay some or all of the money.

Tenshi grants exists to help you gain access to funding for technology innovation projects such as InnovateUK SMART grants and Horizon 2020 funding, so please drop us a line at grants@tenshi.co.uk if you need help with applying for these grants. We can help save you time and money.