Cascade Funding

Cascade funding, also known as Financial Support to Third Parties (FSTP), is a mechanism of the European Commission designed to distribute smaller amounts of public funding in a faster and more flexible way. Its main objective is to support specific aspects such as the adoption of innovative technologies, the promotion of start-ups, and the development of pioneering sectors, among others.

The main goal of this funding method is to simplify administrative procedures for applicants—mostly SMEs and start-ups—allowing certain EU-funded projects to publish open calls to distribute additional funds in turn.

How does cascade funding help SMEs and start-ups?

This mechanism provides start-ups and micro-SMEs with funds ranging from €50,000 to €200,000, offering them the opportunity to build relationships and work side by side with other companies (many of them large and influential European industries), technology centers, and universities. No prior collateral or guarantees are required to participate. Evaluation periods are shorter, and the bureaucratic and administrative processes are simplified. Similarly, reporting requirements for the grant are lighter, as they are usually based on the completion of specific tasks or deliverables.

Which sectors can benefit?

Most of these grants focus on digital areas, particularly Industry 4.0, data, and/or embedded systems. Their scope is also expanding to include blockchain technologies and energy-saving solutions. However, cascade funding can be allocated to a wide range of specific activities—from studies to experiments, pilots, developments, and more.