Cascade Funding
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Cascade Funding

Cascade funding, or also known as Third Party Financial Support, is a mechanism of the European Commission to distribute smaller amounts of public funds in a more agile way, in order to support specific aspects such as the incorporation of new technologies, promotion of start-ups, promotion of pioneering sectors, etc.

The main objective of this funding method is to simplify administrative procedures with applicant entities, mostly SMEs and start-ups, thus allowing some EU-funded projects to issue, in turn, open calls for further funding. In other words, cascade funding is a simplified public funding opportunity designed to facilitate a greater capillarity of EC funds and actions, facilitating the participation of SMEs and start-ups, since for them participating in a European project means dealing with a large amount of bureaucracy.

How does cascade funding help SMEs and Start Ups?

This mechanism offers start-ups and micro-SMEs funds ranging from 50,000 to 150,000 euros; and offers them the possibility of establishing relationships and being able to work side by side with other companies (many of them industries of great weight and importance at European level), technology centres and universities. To participate, no prior guarantee or collateral is required; the evaluation times are shorter, as is the bureaucratic and administrative management itself, and the reporting is simpler since it is based in most cases on work performance.

Cascade funding are grants that are managed and paid by the beneficiaries of the European project that supports them. This means that funding decisions are no longer the responsibility of the European Commission, but of the project leaders or coordinators. They are the ones who open the calls for proposals to attract potential beneficiaries, in particular start-ups and SMEs.

Regarding the sectors that can benefit, the vast majority of these cascade grants cover digital areas, particularly around Industry 4.0, data, embedded systems, but they are also being extended to blockchain or energy saving technologies. However, funding can be allocated to different types of specific activities, from studies, to experiments, pilots, developments, etc.

Reviewing some legal aspects, in cascade funding projects the Intellectual Property Rights of what is developed in each cascade funded project is owned by the applicants of the cascade funding grant, not by the partners generating the cascade funding call.

Some cascade funding programmes are currently open. In Horizon Europe, new cascade funding opportunities are expected to open up. At ZABALA Innovation we organise and manage several of these open calls. Currently, we open new cascade funding opportunities beyond the regular calls through 5 programmes, each with their own open calls for funding and/or services targeted at small scale enterprises and local authorities.

These programmes are initiatives that foster entrepreneurship and start-ups across Europe in different sectors, with a preponderance of ICT applied to different vertical sectors such as Industry, Energy, Big Data, Logistics, Environment, Health, Media, Smart Cities, etc.

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