Updates from the latest EU Innovation Finance Forum
What is the EU Innovation Finance Forum?
The EU Innovation Finance Forum is a key element of STAR*track’s aim to facilitate access to finance opportunities and seeks to unlock private innovation finance in clean technology and new business models in the built environment, with a view to increase EU competitiveness.
From first contact to funding
The journey from identifying initial funding requirements to securing a tangible funding opportunity is rarely straightforward. Discussions in the EU Innovation Finance Forum showed that, when searching for an investor, understanding which type of funding best fits the company’s situation is crucial, as is finding the right match, building trust and improving readiness.
Lessons learnt from the latest forum:
Define the right funding need
Forum discussions highlighted that innovators should identify what type of funding they need prior to approaching investors.
Innovators often approach investors when they need new financing, but the term ‘private funding’ can mean different things, including debt, equity, blended finance, corporate-backed opportunities or public-private instruments.
The message is clear: identify exactly what is needed before starting to look for funders.
Targeted matchmaking matters
Participants stressed that networking alone is ineffective when investors and innovators are not aligned on sector, geography, maturity or mandate. More selective, in-person formats were seen as valuable for building meaningful connections.
Finding the right match is essential both for innovators and investors, but broad networking is not enough. Conversations are often poorly targeted, as innovators sometimes forget to research who they are addressing and why they want to be matched. This often leads to a mismatch in terms of mandate, geography, or sector focus.
Participants of the Forum highlighted the importance of more selected formats, with a preference for in-person matchmaking: short one-to-one meetings, and clearer pre-selection.
Trust is essential on both sides
Even with the right matchmaking, mistrust can prevent effective communication on both sides and can ultimately become a barrier to financing. Founders may worry that investors will push them in directions misaligned with their vision to maximise profits, and investors may worry about unrealistic assumptions and a lack of credibility.
Relationship-building skills, integrity and due diligence were all identified by forum members as key to overcome potential mistrust.
Overinflated company valuations could also potentially be viewed as a red flag by investors, with the potential to damage trust and cause investors to back out. At the same time, trust must go both ways: investors also need to show that they can be reliable partners who support both the growth of the company and positive outcomes for their founders.
Public and private finance can work together
Public and private funding should not always be seen as opposing factors. In many cases, they can be combined as part of the innovation journey. There already exists an existing range of EU-level instruments that combine public and private logic.
Programmes such as the EIC Accelerator, EIT Manufacturing, and other smaller initiatives can be a first step to help innovators move forward while preparing for private capital.
The support of well-known institutions via accelerator participation, demonstrations with large corporations or public institutions and strong partnerships can all strengthen investors’ confidence.
These signals do not replace due diligence, but they help show that a solution has already been tested or challenged in a meaningful way.
To summarise
The main lesson from this meeting of the EU Innovation Finance Forum was that private funding is not only about access to the funding itself; it is a journey that usually starts with a financing need but depends on trust, requires capacity building, and necessitates seeing the investors as partners.
Funding discussions, therefore, can only begin with the right match, the right preparation, and enough trust to move forward.
