Investors can now recommend start-ups to receive up to €500,000 in co-investment from EIT Health in return for options. Through the new Start-up Rescue Instrument, EIT Health aims to bridge the fundraising gap of start-ups in Series A, Series B and bridge-financing rounds.
The COVID-19 crisis has put pressure on investors to keep their portfolios afloat. As part of the EIT Crisis Response Initiative, the EIT Health Start-up Rescue Instrument aims to alleviate the economic shock posed by the pandemic. The new instrument increases investor firepower and contributes to bridging the fundraising gap of start-ups in life sciences innovation.
EIT Health will leverage the value of an investor’s commitment and co-invest up to € 500,000 in grants for options. The investor will need to provide start-up with evidence of ability and willingness to coinvest at least 50% of EIT Health grant-for-equity requested under current terms to be submitted with application. For example, if a private investor invests at least € 250,000, EIT Health will match this with a € 500,000 grant, giving the start-up a total cash injection of € 750,000.
The higher the private coinvestment the more competitive the application. EIT Health will grant the start-up up to € 500,000 for a project running over 8 months and will ask for options in return. The grant-for-options scheme will be based on the pre-money valuation of the current round or the post-money valuation of the start-up’s last round, as well as the financial commitment of EIT Health.
Private investors already present or new to capitalization table engaged in investment negotiations with start-ups whose fundraising rounds have been affected by the COVID-19 crisis. Private investors including but not limited to: Business Angels, Super Angels, CVCs, VCs, family offices and other equity investment partners who could support current or target portfolio start-ups. The start-ups (incorporated on or later than 1 January 2013) seeking Series A or Series B financing round or was in promising preparation of a bridge financing round € 1 million (or more) before COVID-19 crisis. The investment rounds affected/postponed by the COVID-19 crisis. It is for start-up in Biotech (TRL 4 or higher) and Medtech/Digital Health (TRL 6 or higher). Be an SME According to EU definition registered in EU Member State or Horizon2020 countries. The application deadline is Monday, 1 June (11:59 pm / 23:59 uur).