The Money Already Sitting There

Public funding is not raised. It is budgeted, written into a legal text and published with a date on it. Horizon Europe carries EUR 95.5 billion across 2021 to 2027. That figure was fixed in 2020, before most of the companies now arguing about runway existed. The European Innovation Council Accelerator pairs a grant of up to EUR 2.5 million with up to EUR 15 million of equity. The calls sit in one place, the EU Funding and Tenders portal, each with a number, a text and a closing date. The current framework runs to 2027. Below the European layer sits the national layer, and it is bigger than most founders assume. Germany routes research money through Projekttraeger Juelich, an agency that administers federal programmes on behalf of the ministries. BAFA runs guarantee and consultancy voucher schemes. ZIM funds innovation in small and mid-sized companies at a published share of eligible costs. Spain routes industrial research through CDTI and its Misiones Ciencia e Innovacion calls. Development partnerships run through GIZ and develoPPP, on rolling applications. Every one of them publishes the same three things: an envelope, a deadline, and a text stating exactly what it will pay for. I have signed a EUR 20 million personal guarantee. That is what the other kind of capital looks like from the inside, and it remains the most expensive money I have ever touched.

Run the arithmetic on a company that sells 15 per cent of itself for EUR 2 million at a EUR 13 million post-money valuation. Two million in, 15.4 per cent out, permanently. Now run it again with the same EUR 2 million arriving as grant funding. Nothing comes off the cap table. That is the whole argument, and it is not a secret. It is in the state aid framework in writing. Small amounts move under the de minimis ceiling, EUR 300,000 across three fiscal years for most sectors. Anything above that runs through the General Block Exemption Regulation, which sets out who can be funded, at what intensity, and against which cost categories. That block exemption was revised in 2023. Intensity means the share of the bill the programme pays. Fifty per cent of eligible costs is the normal rate in research-heavy calls. Eighty per cent appears in development and regional schemes. Eligible is the operative word: VAT is usually out, sales and marketing are out, and the founder doing three jobs has a narrow line in the budget. The grant still has a price. Weeks to write, years to report, an audit at the end. It is a finite price. Equity is a price you pay every time the company wins. A grant is a price you pay once. The probability that a founder can name the three open programmes their own company qualifies for today is not high. Most are pricing it at zero.

A grant application is not read the way an article is read. It is scored against a published grid, by people working through a stack of them. Horizon Europe scores three headings: excellence, impact, and implementation. Page limits are enforced, and annexes that break the format are removed before anyone reads the content. Eurostars funds consortia led by a small or mid-sized company alongside partners in at least two participating countries, over projects that run 24 to 36 months. National programmes score on fit with the call text, and the call text is a contract written in advance. What the evaluator looks for is arithmetic that ties. A work plan with named work packages and month numbers. A budget that adds up to the eligible costs and not a euro beyond. A description of the current state of the art that proves you know who else is working on this. I have restructured a EUR 75 million industrial group. Every one of those files went to a committee that read the numbers first and the narrative second, and a grant panel reads in the same order. Nobody funds the idea. They fund the file.

Most of the money in the larger programmes does not go to a single company. It goes to a consortium, and a consortium is a legal structure with rules attached. Horizon Europe collaborative calls require at least three independent entities from three different countries. Eurostars requires partners in more than one participating country. ZIM cooperative projects require a partner alongside the applicant. Development partnerships through develoPPP require a local partner and accept applications continuously. Then comes the split inside the group. The coordinator owns the consortium agreement, the reporting periods that arrive every twelve to eighteen months, the money flow and the audit trail. The partners deliver work packages. Coordinators carry more administration than they expect and usually discover the size of it in month fourteen. Finding those partners is a task with its own machinery. National contact points exist for exactly this, programme by programme, country by country. They answer questions about eligibility for free, which is the last free thing in the process. The partner list is not a formality. It is the eligibility.

Equity is a price you pay every time the company wins. A grant is a price you pay once.

Look at a year of calls in a single sector and count them. Then count the people in a small company who can write one. A full collaborative proposal runs forty to eighty pages before the annexes. A single-company innovation application runs shorter but demands the same evidence. Two-stage calls double the round trips: the EIC Accelerator asks for a short proposal first, then a full one, then an interview in front of a jury. The working method that survives this is boring. Score every opportunity on a 10-point scale and file only above 8. Track each one through the stages a sales pipeline already uses: identified, qualified, drafted, submitted, contracted. Put the deadline in the calendar on the day the call is published, not the week it closes. I have built companies across twelve countries, and the failure I have watched most often was never a shortage of opportunity. It was one person carrying eleven deadlines in the same quarter. The pipeline does not fail at the money. It fails at the keyboard.

Deadlines in public funding are not gentle. European calls close at 17:00:00 Brussels time on a published date, and the submission system counts to the second. Spanish calls open when the resolution appears in the official state bulletin. German programmes open and close with the ministry, sometimes on a four-week window. The paperwork before the paperwork is where submissions die. Registering an entity on the EU portal and getting it validated takes days. Validating the bank account takes more. Declarations, letters of intent, partner signatures and cost statements all have to be collected from people who are busy and sit in other time zones. The last 60 minutes are the most dangerous stretch in the process. That is when the system is slowest and when the missing signature is discovered. A missed deadline is not a rejection. It is a deferral nobody chose, and the deferral is usually a full year. That is the difference between the two kinds of failure. A rejected proposal costs the writing time. A missed call costs the year.

An application is an option, and the option has a price: 40 hours of writing against a EUR 2 million budget line. The return is published, which is unusual. Portals list how many proposals each call received and how many were funded, so the odds on a given programme are readable before you start writing. Public money also behaves differently from investor money once it arrives. It pays against a defined cost base and a schedule, it wants the invoices and the timesheets, and it will ask for them again at the end. In exchange it does not ask for a seat, a board vote, or a share of the exit. The probability that a company operating in a regulated industry is eligible for at least one open programme today is close to one. The probability that it has filed is much lower. The gap is not information, because the information is published. The gap is capacity. I took a company through a Frankfurt listing, and the money that took the longest was never the money with the best terms. It was the money nobody had gone and asked for. The money is already sitting there. It is waiting on a document nobody has written. What this piece describes are published programme rules and published rates. It is not advice, the rules change with every work programme, and the only authority on any call is the call text itself and the contact point that administers that call.