Pilot2Service Funding Pathway Design
Purpose
Build a funding strategy that combines non-dilutive and dilutive funding in the right order, and manage runway.
Based on
the owner's published commercialisation guide (owner, 2025). Chapter "How Spin-outs Are Funded?" (pp. 34-45) — the handbook's longest chapter.
- EIC Accelerator, EIC Pathfinder/Transition, SBIR/STTR (USA), Eurostars, national PoC funds
- EIC Impact Report 2025: over €1bn invested in 272 companies, over €3 of private capital mobilised per €1 of EIC funding
- University venture funds (e.g. Oxford Science Enterprises, Stanford's StartX)
- Tax incentives: UK EIS/SEIS, France JEI
Method
- Map non-dilutive sources first: proof-of-concept funds (your own organisation, NSF I-Corps, Innovate UK, ERC PoC, EIC Pathfinder/Transition), national commercialisation programmes (NSERC I2I, CRCP, etc.).
- Map larger public programmes for the scale-up stage: EIC Accelerator (grant + equity, up to €2.5M grant + €15M equity), SBIR/STTR phases, regional equivalents.
- Once technical/commercial proof exists, move to dilutive funding: angel investors → the university's own venture fund (if one exists) → VC (Series A, B...).
- Choose investors carefully: look for a track record in your sector/deep tech; be wary of inexperienced investors who can stall a deal with non-standard terms.
- Consider international and specialised funding sources (impact investors, foundations) if the innovation has a social or environmental dimension.
- Note tax incentives (e.g. UK EIS/SEIS, France JEI) — they lower the investor's risk and make it easier to raise money.
- Manage runway deliberately: track burn rate, start the next round in time, spend money on value-creating things (validated IP, prototypes, approvals, customer traction) — not on offices or other non-critical costs.
- Build the funding pathway in stages, for example: v0 seed money for a prototype → v1 incorporation + PoC grant + angel → v2 EIC/SBIR-phase funding → v3 Series A on the back of proven progress.
- Build relationships with funders and investors BEFORE you need money — early engagement significantly strengthens an application/pitch.
Gotchas
- The non-dilutive-before-dilutive ordering (steps 1-3) is a sequencing principle, not optional colour — approaching angels or VCs before exhausting proof-of-concept/non-dilutive sources dilutes equity earlier than necessary for validation work grants could have funded instead.
- Step 3's move to dilutive funding is gated on "once technical/commercial proof exists" — pitching investors before that proof exists is a common way applications get rejected or come back with worse terms.
- Runway management (step 7) explicitly names spending on offices or other non-critical costs as the failure mode to avoid — a well-funded round can still fail the "spend on value-creating things" test if burn goes to overhead instead of IP, prototypes, approvals, or customer traction.
- Investor selection isn't just about check size: step 4 warns that an inexperienced investor (no track record in the sector/deep tech) can stall a deal with non-standard terms — track record matters as much as the amount offered.
- Figures like the EIC Accelerator's "up to €2.5M grant + €15M equity" are the programme's terms at time of writing, not guaranteed constants — this skill explicitly does not guarantee current programme availability or terms (see "What this skill does NOT do"), so verify directly with the funder before relying on a specific number.
What this skill does NOT do
- Does not calculate a precise ROI/NPV model for you — see
business-case-and-analysis:roi-npv-sensitivity-model. - Does not give investment advice.
- Does not guarantee the availability or terms of a specific funding programme — programmes change, check current details directly with the funder.
Continue from here
- Next in this pack:
../commercialisation-journey-roadmap/SKILL.md— Structure the entire commercialisation journey into five stages and build an actionable roadmap that ties stage gates to agile iteration. - Related skill in another pack:
../../../../business-case-and-analysis/skills/roi-npv-sensitivity-model/SKILL.md - Pack's shared guardrails:
../../CLAUDE.md - Overview of the full journey:
../commercialisation-journey-roadmap/SKILL.md
References
../../references/case-studies.md— 7 spin-out examples from different industries and regions../../references/terminology.md— the handbook's glossary../../references/sources.md— the handbook's own source references../../CLAUDE.md— the pack's shared guardrails