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Startup Playbook: success through failure

Applying for EU funding is a nightmare for startups



The EU's definition of 'great' is ‘safe’, with just a flirtatious wink at innovation, and all wrapped up in a nice thick blanket of bureaucracy.
Pull up a chair, pour yourself a glass of sarcasm, and let's give the EU grant funding roulette wheel a spin. I’ll start with a question, one that most European startups will be familiar with, and which is this: Why are EU grants such an absolute nightmare?
The article was published in Sifted, here is the extended version.
I’m not just talking about the application process, the evaluation stage is also a disaster, which in many cases takes longer than the actual project.
And when you finally get the money, the project management process may make you wish you’d never applied in the first place. Project management, however, is the undeniable winner and may make you wish you never accepted the money.
There are plenty of EU grant opportunities out there, with national grants being the low-hanging fruit and cascade funding from Horizon programmes coming in second.
Then there are consortium-based multi-million euro projects that startups are drooling over.
Bear in mind, that none of these grants involve you giving away any equity: I mean, who wouldn't want funding without losing an ounce of ownership?
My heart and soul (not to mention tons of coffee) have been offered up on the altar of grant applications, and I've learned the hard truth: the process is as fun as pulling teeth.
The good thing is that you don’t have to be the Elon Musk of your field to score an EU grant, you just need to know the rules of the game.
It is crystal clear to me that the EU's definition of 'great' is more like marrying safety with a flirtatious wink at innovation, all wrapped up in a nice thick blanket of bureaucracy.
Writing applications is a tedious process that I utterly hate. As an educator, each time it sends me down an abyss and into an existential crisis due to its inefficient nature.
Over a span of five years, my team and I have submitted dozens of applications, some successful, others unsuccessful. And since nobody is shouting about their failures from the rooftops, sizing up where we stand is like trying to track a chameleon in a bag of Skittles. Personally, I think we are doing alright, considering the effort that we put into it, but some statistics would be nice.

The rules of the game

Once you swallow the bitter pill that is the application process, give it anywhere between three to 12 months to get the results. During one such waiting period, my team and I actually built our proposition before the evaluation came in. When the rejection letter arrived, saying we lacked the expertise to carry it out, we were tempted to send them a demo of the finished product.
Officially, if your application gets rejected, you are allowed to appeal. We tried it a few times and I can tell you it is utterly useless.
Once our application was dismissed because an attachment was missing, which, as we discovered, was due to a technical malfunction of the F6S platform, used for application submissions, the company that is part of almost every cascade funding project.
When the people behind the grant disregarded our legal right of a redress, we escalated the issue to the Commission's official redress channel. Our lawyer won a small victory by getting them to agree to the redress request.
But guess who heard the redress appeal? The same folks who had initially turned us down.
We would often get contradictory criticisms in the same evaluation letter. One day, they love my commitment and the next day they doubt whether I can stay focused on the goal. One day they value our extensive experience” and the next they are concerned that we are “only in the start-up phase”.
We were criticised for harping on too much on gender equality, yet also for not highlighting the social impact.
And my personal favorite? I was called overambitious - as if that poses a risk. I take it as a compliment.

The safety of innovation

A couple of years ago I started looking towards larger grants because I was told that the effort to benefit ratio was basically the same whether you are applying for 50,000 or 5 million euros.
That sounded intriguing, so I started my research. I discovered that most of the grants require a consortium: Many want a university or an established (read “safe”) organisation to be the leader of organizations that must be from different EU countries. But these consortiums are a very tricky thing.
It was impossible for us to get into an existing consortium on the EYE programme, let alone create a new one because . An eligibility requirement requires that no less than half of the consortium must have at least five years of experience in implementing the EYE programme, including the consortium leader.
As a consequence of this rule, we can’t start a new consortium. Nor can we join an existing one as a spot appears only when a member leaves, which they almost never do because it’s easy money. I don’t know about you, but to me it smells like nepotism.

Is it worth it?

I still strongly believe that startups should try their luck. Grants do help with the runway, but you pay the price: you work extra hours to satisfy the bureaucratic machine. Keep this in mind: roughly 50% of your activities in funded projects will go towards writing reports.
Picture this: a project receiving over 200,000 euros for a two year project to build an online course for female entrepreneurs. The final product? A couple of quizzes and seven Canva presentations which could be thrown together by a half-asleep intern in two months.
So what have they been doing if it’s not building a product? They’ve been organizing internal meetings and writing endless reports, all in the name of "dissemination", the beast that needs to be continuously fed at the expense of innovation.
My overall impression is that you need to choose between building your startup and building a company that gets EU grants. If you choose the latter, grant evaluators will definitely swipe right and EU funding becomes nothing but a numbers game. Every round gets you inches closer to mastering the bureaucratic mambo of grant applications.