Is my idea suitable for the P2 call - Incentives for starting innovative companies?

Call for proposals P2 - Incentives for the launch of innovative companies is one of the most desirable additional sources of financing for young or startup companies. At the Koroška Online Business Incubator, we have already introduced a program for this purpose years ago, with which we help members of our community apply for the call.

Although applications for 2024 have already closed, we believe that there is still a good time to gain new knowledge about the P2 call. A successful application does not start being prepared on the day of the call, but months in advance. This article is intended to do just that – to help you learn about the call and start building the foundations for a successful future candidacy now.

First and foremost. The P2 call for proposals has changed significantly in 2024 compared to previous years. Also due to these changes and the relatively short application deadline, many companies did not decide to apply this year. The key changes are as follows:

• The solution must be consistent with at least one priority area from the Slovenian Sustainable Smart Specialization Strategy (S5). The priority and focus areas and product directions of S5 can be found at this link , and the full S5 document here.
• Instead of participating in the pre-selection, an additional 7 points in the call are awarded by participating in the start-up training. This is an 8-hour training course conducted by the SPS - more information at this link.
• Higher subsidy per company - from EUR 54,000 to EUR 72,000 subsidy/company.
• Instead of 40 companies, 30 companies are supported, 16 companies from the Eastern and 14 companies from the Western Cohesion Region. The door to obtaining a subsidy is therefore even more open.
• Only limited liability companies (LLCs) and no longer sole proprietors and cooperatives can apply for the tender.

Below, we focus on the essential features of the call for proposals that you need to know for a successful application.

The focus is on young, innovative and sustainably oriented companies

The P2 call focuses on supporting startups that develop innovative products or services for the European or, even better, global market and have the potential for rapid growth. The subsidy is intended for the development of an SME - Minimum Viable Product (MVP) and, after completion of development, the launch of this product on the market.

The essential condition is that it is a young innovative company, registered as a limited liability company. It must be established between 1 January one year before the year of publication of the call and 15 March in the year of publication of the call. For illustration: companies established between 1 January 2023 and 15 March 2024 were eligible to apply for P2 2024.

The company must have a team (preferably 3-4 members) with specialized skills that allow the implementation of most of the activities required for product development within the company. The team must cover 3 key areas in a startup company: development, design and marketing / sales. We often get asked what stage of development the product should be in and whether the team members must be employed. The answer to the question regarding the product: it is desirable that the product is in the prototype phase, the development must not be completed yet; namely, the call for proposals co-finances the development of the product. As for the team, to obtain part of the points, it is enough that at least one team member is employed at the time of submitting the application. The other team members can participate in other ways.

And another new feature that we have already mentioned: companies that focus on areas consistent with the principles of climate neutrality, the circular economy and the smart specialization strategy (S5) will be given priority.

Amount of funds, eligible costs and co-financing

With a successful application, a company can obtain €72,000 in grants, which are paid in 3 parts. The first payment is up to €12,000, the second up to €21,000, and the third payment up to €39,000. The first payment is expected to be made within a few months after signing the contract. The project can cover all project-related costs: from employee salaries, purchase of machinery and equipment, costs of external contractors, etc.

The advantage of the P2 call over many others is that the funds are paid in the form of a lump sum. This means that the costs do not need to be proven with invoices, receipts for payment of invoices, etc. The matter is set up in such a way that the project is divided into three phases. When each phase is completed, a report must be prepared in which we prove the achievement of milestones. Therefore, if we achieve all the required milestones for the 1st phase and receive a positive business assessment from the Slovenian Enterprise Fund, we will receive the 1st part of the funds (12,000). This is repeated for the 2nd (21,000 €) and 3rd phases (39,000 €).

Required milestones

In the previous chapter, we mentioned milestones, which are shown in the table below. We can think of them as goals that must be achieved in order to be eligible for the disbursement of the call funds. But let us repeat: all required milestones for each phase must be achieved in order to be disbursed!

Milestones

Call criteria P2

Like any call, P2 also has certain criteria on the basis of which applications are evaluated. A maximum of 100 points is possible; projects that receive less than 60 are in no case eligible for co-financing. Just for a sense: in the past, the threshold number of points that allowed obtaining a subsidy ranged between 75 and 85 points.

The criteria for the P2 2024 call were as follows:

1. Innovation (up to 30 points). A business idea can be considered innovative if the company has a first-mover advantage, an innovative product or service that delivers a better and cheaper solution than existing products or services on the market.
2. Environmental impact and sustainability of the operation (up to 16 points). The impact is assessed in the following areas:
   • prevention and control of air, water and soil pollution, reduction of the use or release of harmful substances;
   • circular economy, recycling or reuse of waste materials;
   • lower consumption of raw materials/materials/energy and
   • sustainable use and protection of water resources.
3. References and employment of owners in the company (up to 14 points). If at the time of application there is one person employed who is also at least 25% owner of the company, the company gains 11 points out of a possible 14.
4. Predominant sales market (up to 13 points). If the company targets only Slovenia, it gets 0 points. It gets 13 points only if the predominant sales market of the product/service is the global market. It is necessary to specifically justify which countries in the world and how the company will reach them with its products.
5. The amount of share capital as of 15 March 2024 (up to 12 points). Only capital paid in cash counts. To receive 12 points, the capital must be €25,000 or more. The amount is checked on a specific cut-off date - this year it was 15 March 2024.
6. Assessment of the compliance of the implementation of the activity with the objectives and subject matter of the public tender (up to 8).
7. Cooperation with an innovative environment entity (up to 7 points). Investors only gain points if they have attended start-up training at one of the selected innovative environment entities (SIO) - more at this link.

What happens next if I want to apply for the call?

Our recommendation is step-by-step ? We believe that all the information and requirements presented above can seem quite intimidating. Especially if you are encountering tenders for the first time. Therefore, we recommend the following:

• If you have a company or a business idea that you think is suitable for the P2 call, please present it to us. Start with this form, and we will then invite you to a meeting where we will discuss everything in more detail. MPIK has already helped many companies apply for the P2 call, and we believe that we can help you too!
• If you want to see what the application form for the P2 2024 call looked like and review the entire call documentation, you can find it at this link.

At the Online Business Incubator of Koroška (MPIK), we are also happy to assist you with all other questions related to the development of your business idea.

Sources:

• Slovenian Enterprise Fund, call for proposals P2

Author: Jure Knez, RRA Koroška doo – Network Business Incubator Koroška