Blended Finance
A funding approach that combines public grants or guarantees with private investment (equity, debt, or venture capital). The EU uses blended finance through instruments like InvestEU to de-risk private investment and mobilise capital for projects that would otherwise struggle to attract market financing alone.
Cascade Funding
Also known as Financial Support to Third Parties (FSTP). A mechanism where EU-funded projects redistribute a portion of their grant budget to SMEs and startups through open calls. Typical amounts range from €50K to €200K, with simplified application processes and faster evaluation timelines than direct EU calls.
Co-Financing
The requirement for grant beneficiaries to cover a portion of the total project costs from their own resources or other non-EU sources. Co-financing rates vary by programme: Research and Innovation Actions under Horizon Europe cover up to 100% of eligible costs, while Innovation Actions typically cover 70%, meaning the beneficiary must co-finance the remaining 30%.
Consortium
A group of organisations (companies, universities, research centres) from multiple EU member states that jointly apply for and carry out an EU-funded project. Most Horizon Europe collaborative calls require a minimum of three independent legal entities from three different member states or associated countries.
COSME
The EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises. Running from 2014-2020 with a €2.3B budget, COSME improved access to finance, supported internationalisation, and strengthened the business environment. Its successor activities are now integrated into the Single Market Programme and InvestEU.
CSA (Coordination and Support Action)
A Horizon Europe funding type that supports coordination, networking, and policy activities rather than direct research. CSAs fund conferences, studies, exchange of best practices, and awareness-raising activities. They are funded at 100% of eligible costs and do not produce new knowledge or technology themselves.
Digital Europe Programme
A €7.5B EU programme (2021-2027) focused on deploying digital technologies across five areas: supercomputing, artificial intelligence, cybersecurity, advanced digital skills, and the wide use of digital technologies across the economy and society. Unlike Horizon Europe, Digital Europe funds deployment and capacity building, not research.
EDIH (European Digital Innovation Hub)
One-stop-shops co-funded by the Digital Europe Programme that help companies (especially SMEs) improve their business processes and products through digital technology. EDIHs offer services including test-before-invest facilities, training, access to finance advice, and innovation ecosystem networking. Over 200 EDIHs operate across all EU member states.
EIC (European Innovation Council)
The EU's flagship innovation programme with a €10.1B budget (2021-2027), designed to identify and support breakthrough technologies and game-changing innovations. The EIC operates through three main instruments: Pathfinder (early-stage research, TRL 1-4), Transition (validation, TRL 4-6), and Accelerator (market-ready, TRL 5-9, offering up to €2.5M grant plus €15M equity).
EIF (European Investment Fund)
A specialised EU body focused on providing risk finance to SMEs across Europe. The EIF does not invest directly in companies; instead, it works through financial intermediaries — venture capital funds, guarantee facilities, and microfinance institutions. The EIF manages over €3.2B and has backed 700+ VC managers across Europe.
Eligible Costs
Costs that can be reimbursed or covered by an EU grant. To be eligible, costs must be incurred during the project period, necessary for implementation, identifiable and verifiable, compliant with applicable laws, and reasonable. Common eligible cost categories include personnel, subcontracting, equipment, travel, and other direct costs. Indirect costs are typically covered through a 25% flat rate.
Equity Investment
In the EU funding context, direct investment by EU bodies (such as the EIC Fund) in exchange for company shares. The EIC Accelerator is the primary programme offering equity, with investments of €0.5M to €15M per company. Unlike grants, equity investment means the EU becomes a shareholder, though the EIC Fund operates on a co-investment basis and aims for timely exits.
ERC (European Research Council)
The premier European funding body for frontier research. ERC grants support individual researchers pursuing groundbreaking, curiosity-driven research across all fields. ERC offers Starting Grants (up to €1.5M for researchers 2-7 years post-PhD), Consolidator Grants (up to €2M for 7-12 years post-PhD), Advanced Grants (up to €2.5M for established leaders), and Synergy Grants (up to €10M for 2-4 researchers).
EU AI Act
The world's first comprehensive legal framework for artificial intelligence, adopted by the EU in 2024. The AI Act classifies AI systems by risk level (unacceptable, high, limited, minimal) and imposes corresponding obligations. It creates regulatory sandboxes for innovation and affects startups building or deploying AI in the EU market.
GAP (Grant Agreement Preparation)
The administrative phase between a positive evaluation result and the signing of the grant agreement. During GAP, successful applicants must provide legal, financial, and operational documentation; finalise the work plan and budget; and complete the consortium agreement. GAP typically takes 2-4 months but can take longer for complex projects.
Grant Agreement
The legal contract between the European Commission (or its agencies like EISMEA, REA, or HaDEA) and the beneficiaries of EU funding. The Grant Agreement specifies the project scope, budget, reporting obligations, intellectual property rules, and all rights and obligations of both parties. It is governed by the Model Grant Agreement (MGA).
Green Deal
The European Green Deal is the EU's flagship strategy to make Europe climate-neutral by 2050. It drives billions in funding across multiple programmes including Horizon Europe, InvestEU, and the Innovation Fund. Green Deal priorities — clean energy, circular economy, zero pollution, biodiversity — are embedded as cross-cutting requirements in many EU funding calls.
Horizon Europe
The EU's main research and innovation programme with a budget of €95.5B (2021-2027). It is the world's largest transnational R&I programme. Horizon Europe is structured into three pillars: Excellent Science (ERC, MSCA, research infrastructures), Global Challenges and European Industrial Competitiveness (six thematic clusters), and Innovative Europe (EIC, European innovation ecosystems, EIT).
IA (Innovation Action)
A Horizon Europe funding type that supports activities directly aimed at producing plans, designs, or prototypes for new, altered, or improved products, processes, or services. IAs may include prototyping, testing, demonstrating, and piloting. The EU co-financing rate for Innovation Actions is 70% of eligible costs (100% for non-profit organisations).
InvestEU
The EU's investment programme that provides an EU budget guarantee of €26.2B to mobilise over €372B in additional investment across Europe (2021-2027). InvestEU operates through financial intermediaries and covers four policy windows: sustainable infrastructure, research and innovation, SMEs, and social investment and skills.
MGA (Model Grant Agreement)
The standard template used for all EU grant agreements under Horizon Europe and other centrally managed programmes. The MGA defines the general conditions, rights, and obligations of beneficiaries including reporting, payments, intellectual property, liability, and termination clauses. Understanding the MGA is essential for project management and compliance.
MSCA (Marie Sklodowska-Curie Actions)
A Horizon Europe programme supporting researcher mobility and career development. MSCA funds doctoral networks (training of PhD candidates), postdoctoral fellowships, staff exchanges between academia and industry, and citizen-science projects. With a budget of €6.6B, MSCA is the EU's flagship programme for training, mobility, and career development of researchers.
Non-Dilutive Funding
Funding that does not require giving up company equity. EU grants are the primary form of non-dilutive funding for startups, providing capital to grow without reducing founder ownership. The EIC Accelerator is notable for offering both non-dilutive (grant up to €2.5M) and dilutive (equity up to €15M) funding in a single application, allowing founders to choose their preferred mix.
PIC (Participant Identification Code)
A unique 9-digit identifier assigned to every organisation that registers in the European Commission's Funding & Tenders Portal. A PIC is required to submit proposals or participate in any EU-funded project. Registration involves providing legal, financial, and administrative information. Once assigned, the PIC is used across all EU programmes and calls.
RIA (Research and Innovation Action)
A Horizon Europe funding type that covers fundamental and applied research, technology development and integration, testing, and validation of prototypes in a laboratory or simulated environment. RIAs are funded at 100% of eligible costs. They are the most common action type in Horizon Europe's Pillar II clusters.
Seal of Excellence
A quality label awarded by the European Commission to project proposals that scored above the funding threshold in a competitive EU evaluation but could not be funded due to budget limitations. The Seal certifies the proposal's quality and can be used to seek alternative funding from national or regional programmes, many of which have fast-track schemes for Seal holders.
SME (Small and Medium-sized Enterprise)
As defined by the EU, an enterprise with fewer than 250 employees and either annual turnover not exceeding €50M or annual balance sheet total not exceeding €43M. The EU further distinguishes micro-enterprises (fewer than 10 employees) and small enterprises (fewer than 50 employees). SME status determines eligibility for many EU funding programmes and often provides higher co-financing rates.
TEF (Testing and Experimentation Facility)
EU-funded facilities that provide SMEs and startups with access to physical and virtual infrastructure to test and validate AI and other advanced technologies before market deployment. TEFs cover sectors including AI, agri-food, health, and manufacturing. They are funded under the Digital Europe Programme and offer free or subsidised testing services.
TRL (Technology Readiness Level)
A 9-level scale used by the EU to assess the maturity of a technology. TRL 1 is basic research (principles observed), TRL 4 is lab validation, TRL 6 is demonstration in a relevant environment, and TRL 9 is a proven system in an operational environment. TRL is critical for EU funding: EIC Pathfinder targets TRL 1-4, EIC Transition covers TRL 4-6, and EIC Accelerator addresses TRL 5-9.
Work Programme
The document published by the European Commission (typically every two years) that defines the specific topics, conditions, deadlines, and budgets for upcoming calls for proposals under a given EU programme. Work programmes translate the strategic priorities of framework programmes like Horizon Europe into concrete funding opportunities. Monitoring work programme publications is essential for timely applications.