Cascade funding, or also known as Third Party Financial Support, is a European Commission mechanism that distributes smaller amounts of public funds in a more agile way, supporting specific topics such as the incorporation of new technologies, the promotion of start-ups and sector pioneers, etc.
The main objective of this funding method is to simplify administrative procedures for 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 funds, ranging from 50,000 to 150,000 euros, to start-ups and micro-SMEs; it offers them the possibility of establishing relationships and working side by side with other companies – many of them from industries of great weight and importance at a 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 is 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 open the calls for proposals to attract potential beneficiaries, more specifically, start-ups and SMEs.
Regarding the sectors that can benefit from this type of funding, the vast majority of cascade grants cover digital areas, such as Industry 4.0, data, embedded systems, but they are also being extended to blockchain or energy saving technologies. However, funding can be allocated to various types of specific activities, from studies, to experiments, pilots, developments, etc.
