Educational only — not investment, legal or tax advice.

The cheapest money a startup can raise is money that doesn’t cost equity. For deep-tech, climate, health and hardware companies in particular, public innovation programs can fund years of development before a venture round. Two of the largest are the EIC Accelerator in Europe and SBIR in the US.

EIC Accelerator (European Union)

The European Innovation Council’s Accelerator is aimed at startups and SMEs with breakthrough technology that are ready to scale. According to the EIC:

• Grant: a lump sum below €2.5 million for innovation activities.
• Investment: €1 million to €10 million in equity or quasi-equity through the EIC Fund.
• Who can apply: single startups or SMEs (including spin-outs) from EU member states and associated countries, and small mid-caps of up to 499 employees.
• Process: four steps. A short application (12-page form, pitch deck and video); a full proposal of about 20 pages; an interview with a jury; then the grant agreement and investment due diligence.
• Budget: the EIC lists a 2026 budget of €634 million across its open calls and challenge calls, with several cut-off dates through the year.

Who should apply: companies with technology that is genuinely novel, a large market, and a plan to scale in Europe. It is competitive and time-consuming, so treat the application like a fundraise.

SBIR and STTR (United States)

SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) are federal programs, coordinated by the Small Business Administration, that give equity-free funding to American small businesses developing technology. Funding comes through participating federal agencies, each with its own topics and deadlines.

• Phase I: proof of concept. SBIR.gov states that, as of April 2026, agencies can award Phase I grants up to $323,090 without additional approval.
• Phase II: full development, up to $2,153,927 without additional approval.
• STTR requires a partnership with a research institution.

Who should apply: US technology companies whose work matches an agency’s published topics (defence, health, energy, science and others). The agency is effectively your first customer and validator.

How grants fit with venture money

1. They extend runway before a priced round, so you raise later at a higher valuation.
2. They signal technical credibility to investors who struggle to evaluate deep tech.
3. They come with obligations: reporting, milestones, and rules on how funds are spent. Budget the admin time.
4. They are slow. Plan for months between application and money. Never rely on a grant to cover next month’s payroll.

From the investor’s side of the table

I built an origination channel with the EIC ecosystem and worked with companies that combined EIC support with private rounds. The strongest applicants treated the grant as part of their funding plan from day one, not a lottery ticket, and used it to de-risk the technology before raising equity.

The short version

Grants cost time, not equity. If your technology fits, the EIC Accelerator or SBIR can fund the riskiest stage of your company on far better terms than any investor.

Sources

• European Innovation Council: EIC Accelerator
• SBIR.gov: About SBIR and STTR

Written by Fabian Cisneros. Educational only — not investment, legal or tax advice. See the full disclaimer.