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Innovative products and ideas can help resolve societal issues and increase wealth. A crucial phase in the process is the step from idea to starting up product development: creating and verifying commercial concepts, identifying suitable markets and developing the right patents (IPs) (as defined by Bradley et al. 2013). For innovative start-ups, this phase is called the proof-of-concept phase. For existing SMEs, it is called the innovation phase. The Proof-of-Concept Funding is there to ensure that an idea develops from the planning phase into the start-up phase.
The Ministry of Economic Affairs and Climate Policy has developed the Proof-of-Concept Funding to help businesses in the proof-of-concept phase or the innovation phase. The Netherlands Enterprise Agency (RVO.nl) and the Technology Foundation STW implement this scheme. The Netherlands Enterprise Agency takes care of its implementation for SME businesses and innovative start-ups. Technology Foundation STW implements it for academic innovative start-ups.
What is Proof-of-Concept Funding?
Start-ups and SME businesses can use a loan from the Proof-of-Concept Funding scheme to research whether their idea is potentially feasible in the market. The loan and the interest calculated on it have to be paid back. The interest is 4.97% (as of 1 September 2016). The EU-reference percentage is variable and is set by the European Commission.
Both start-ups and established businesses can benefit from the Proof-of-Concept Funding. The Proof-of-Concept Funding is aimed at three target groups:
- SME businesses (small and medium-sized)
- Innovative start-ups (≤ 5 years old)
- Academic or hbo innovative start-ups (whose economic activities result directly and immediately from research by a university or academic hospital)
For the period 1 January up to and including 31 December 2017, the total budget for the Proof-of-Concept Funding is €13.54 million, shared among the above-mentioned target groups.
SME businesses and innovative start-ups can submit an application from 1 January up to and including 31 December 2017, 17:00 hours. Applications are dealt with in the order they are submitted, within a maximum of 13 weeks. At the Netherlands Enterprise Agency, the Proof-of-Concept Funding advisory committee evaluates each application individually as to whether it meets the requirements. If so, you will receive the requested loan (if there is still budget available).
Academic start-ups must submit their applications digitally to the Applied and Engineering Sciences (Toegepaste en Technische Wetenschappen, TTW, previously Technology Foundation STW).
Do you want to gauge whether your plan is eligible? Fill in the Quick Scan first.
There are various conditions attached to the use of Proof-of-Concept Funding. Three important conditions are:
- You write a business plan showing you will grow substantially;
- You set out an innovation plan or proof-of-concept plan geared to the preconditions of the investor; and
- You have a declaration of intent from the future investor, who will finance your proof-of-concept/innovation phase on the basis of you meeting the preconditions set by him. This has to at least equal the amount you receive from the government.