Acceleration & Seed Fund

The purpose of this financial instrument is to support Small and Medium-sized Enterprises (SMEs) at their seed and start-up stage by providing funding in the form of either equity or quasi-equity in order to enhance the access to financing to emerging entrepreneurs as well as to streamline the transition to a knowledge-based economy in Bulgaria. The budget of the instrument is EUR 21 million entirely coming from the JEREMIE Holding Fund (JHF).

The Entrepreneurship Acceleration and Seed Financing Instrument is composed of two complimentary compartments, acceleration compartment (similar to Y-Combinator and Techstarts program in the US) – providing initial financing and mentorship for proof-of-concept development and seed compartment – providing follow-on financing to successful graduates from the acceleration compartment as well as to other viable early stage opportunities. The instrument is unique for the Balkan region and is expected to help establish Bulgaria as the hub for innovation and start-up business on the Balkans.

Key Terms

Funds’ investment period: until the end of 2015.
Maximum investment amount: up to EUR 200,000 over any period of three fiscal years reduced to EUR 100,000 for eligible SMEs active in the road transport sector (on aggregate for both the Acceleration and Seed stage).

Eligibility Conditions:

  • The entrepreneur must be must be registered under the Commerce Act of Bulgaria.
  • The entrepreneur must be an SME;
  • The entrepreneur or the idea / investment to be financed must not be in the sectors stipulated by Article 1, paragraphs 1 of Reg. 1998/2006;
  • Furthermore, investments are subject to restrictions in relation to SMEs active in the following sectors:
       1. Arms production and trading;
       2. Gambling;
       3. Tobacco;
       4. Human cloning;
       5. Genetically Modified Organisms.

Selected Financial Intermediaries

The European Investment Fund (EIF) has selected “Eleven” and “LAUNCHub” to manage the EUR 21 million Entrepreneurship Acceleration and Seed Financing Instrument.

Eleven will manage a EUR 12 million acceleration & seed fund with a view to making around 200 investments in innovative young businesses. Investments into individual portfolio companies will typically be in the range of EUR 25,000 – EUR 200,000 per investee. The team is built around prominent professionals with substantial experience in the venture capital and private equity sectors in Bulgaria. Eleven has attracted Google as a technological partner, and Springboard – the London-based mentorship-led accelerator, as a strategic partner for its programme.

 

LAUNCHub will manage a EUR 9 million ICT focused fund, aiming to make around 120 investments over the next 4 years. Investments into individual portfolio companies will typically be in the range of EUR 30,000 – EUR 200,000 per investee. LAUNCHub partners with the largest early-stage micro seed investment fund and mentoring programme in Europe – Seed Camp and with the Cisco Entrepreneurship Institute Bulgaria. The team includes one of the most successful Bulgarian entrepreneurs in the ICT area – Lyuben Belov.

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