Proof-of-concept Funding: Tips for a successful application

General

• Please complete the Quick Scan in advance to check whether your project meets the intended criteria. You will then receive feedback on any areas requiring attention.
• A good application is concise, effective and clear. This enables the advisor to properly assess whether the proposed project meets the scheme’s objectives (please read the conditions).
• The success of Proof-of-concept Funding projects requires thorough preparation, including a business plan and an early-stage plan (download below, in Dutch). To avoid creating an unnecessary administrative burden, the format of these plans is flexible. This allows you to make use of existing plans and information as much as possible. Alternatively, you may choose to use the standard business plan outline as a guide.

Business plan

• Your application will be assessed by advisers from the Netherlands Enterprise Agency and the Proof-of-concept Funding Advisory Committee. They have extensive experience in technological innovations, revenue models, business development and marketing. You undoubtedly have more specific knowledge of the intended technological application and market. You should therefore present your information in clear, understandable language.
• Describe how your project aligns with the scheme’s objective: to become a fast-growing, ambitious business that investors are keen to back. An attractive and sustainable market advantage forms the basis for rapidly gaining market share. This could be a substantial cost saving or added value. Therefore, place the benefit for the customer (the payer) at the heart of your business plan.
• Ensure a thorough competitive analysis with an objective comparison of the product to be developed against the best and/or most widely used existing alternatives. Clearly outline the unique selling points and substantiate them.
• The final cost price is usually relevant to achieving a good margin. Therefore, also provide a cost breakdown and, if necessary, explain the possibilities for cost reduction in concrete terms.
• In doing so, make a conscious choice regarding the revenue model and the marketing approach. Often, a new entrant must not only convince the end-user but also secure a position within the supply chain. It is essential that the entire chain benefits from the advantages. Increasingly, the end-user is unable or unwilling to invest, but is willing to pay for the use of the product.

In practice, the team often proves to be the key to success. This involves not only technical expertise, but also experience in project management, the relevant field of application, and the structure of a sales, distribution and service organisation. It is important to ensure that this knowledge and experience are retained within your own organisation. Please therefore provide information on the background of the existing team and the plans for building the team after the early phase. 

Early-stage plan

• Your project plan will be assessed partly by consultants who are accustomed to quickly familiarising themselves with new technologies and applications. However, you are more specialised in the field relevant to you. You should therefore provide a clear explanation of the technical operation, including a clear description of how it differs from existing alternatives. Where possible, illustrate how it works (images are often more illuminating than long and complex descriptions).
• Check whether your innovation may already exist; for this, you can contact our partner, the Netherlands Patent Office. First and foremost, it is important to establish whether there is freedom to operate. It is often crucial to protect the knowledge adequately. There are various options available for this. Good to know: patents can also be an excellent source of information, for example regarding the existing technology used by competitors.
• Describe the current state of the technology. What activities have already been carried out? Proof-of-concept Funding supports the proof-of-concept phase. You have completed the proof-of-principle.
• Your early-stage plan addresses the investor’s requirements. The conditions set out in the Letter of Intent (LOI) serve as the guiding principles for the activities in your early-stage plan. The advisor links your activities to the conditions in the LOI, so that it is clear that the investor intends to invest provided the conditions are met.
• Provide a description of the activities (including a schedule) to be carried out during the early-stage process. Describe who is responsible for what and when, with logical milestones and a quantification of interim objectives. This validates the Letter of Intent from the prospective follow-on investor: 
  • divide the work into work packages;
  • outline the expertise available (in-house and/or external) for carrying out the work. Who does what?;
  • preferably use a Gantt chart for the schedule;
  • provide a breakdown of the costs of the process.
• Outline the main activities that still need to take place from the completion of the early-stage process to market launch.

Financing plan

• Set out the required funding clearly in a cash flow forecast covering at least 5 years from the start of the project. Clearly specify all anticipated and/or intended sources of funding.
• Explain how you intend to repay the Proof-of-concept Funding loan.
• Explain any key assumptions underlying the forecasts. The forecasts depend on estimates for specific situations. It is important in projects of this kind to think in terms of scenarios and to take into account typical setbacks relating to uncertain cash flow, budgeted development costs and the planned project duration.
• Make the proposed financing as specific as possible.

We wish you every success with your application and with the realisation of your plans.