Proving "Additionality": How to Justify Public Deep Tech Funding to Reviewers

When engineering a piece of breakthrough scientific hardware, academic founders frequently hit a frustrating paradox. To prove their technology works in the real world (TRL 6 or 7), they need significant capital for productization, CE-marking, and supply chain mapping. But when they pitch to traditional venture capitalists, the answer is almost always a polite refusal, citing that the technology is "too early," "too capital intensive," or "lacks a massive immediate market."

This financing gap between an academic bench prototype (TRL 4) and a deployable, scaled system (TRL 7) is universally known as the Valley of Death. According to the European Investment Bank (EIB), deep tech startups require up to three and a half times the capital that regular software startups need to hit the same revenue milestones.

This exact Valley of Death is why public funding instruments like the EIC Accelerator and national innovation grants exist. However, to win this money, you must successfully prove the concept of Additionality—or as the EIC calls it, "Non-Bankability" (the fourth of the four universal pillars of a winning deep tech grant).

Here is how you navigate the requirement for non-dilutive public money and convince evaluators that your project justifies taxpayer support.

What is Additionality?

At its core, Additionality means proving that your project would not go forward—or would be severely delayed or reduced in scope—without public funding.

The European Commission operates under strict competition rules. It is legally prohibited from using public taxpayer money to subsidize projects that private markets (VCs, angel investors, or commercial banks) are already willing to finance. If a project is highly profitable, low-risk, and requires minimal upfront capital (like a standard B2B SaaS platform), it is considered "bankable."

To win a deep tech hardware grant, you must passionately argue the exact opposite. You must prove your project is inherently unbankable by private markets at this specific moment in time.

The Deep Tech Hardware Mismatch

For researchers building low-volume, niche scientific instruments, proving non-bankability is actually your biggest structural advantage. You must weave the economic reality of the "Platform Tax" into your grant narrative.

Evaluators understand that private investors demand hyper-growth and early, massive Total Addressable Markets (TAMs). You must explicitly detail why your hardware fundamentally misaligns with VC economics during the TRL 4-to-7 phase:

High CAPEX without Revenue: VCs want capital to fuel sales and marketing. In deep tech hardware, your first €1 million is entirely consumed by engineering standard enclosures, writing custom Hardware Abstraction Layers (HALs), and navigating EMI shielding compliance—all before a single unit can legally be sold.
Long Development Horizons: While a software startup might pivot and launch in six months, standardizing a novel optical metrology tool takes years. This timeline exceeds the risk tolerance of standard early-stage funds.

How to Prove Additionality in Your Proposal

Stating "we have no money" is not enough to prove Additionality. Evaluators want evidence of the funding gap and a strategic execution plan to bridge it.

1. Document Private Market Rejections

In the EIC Accelerator and similar grants, a rejection letter from a VC is a badge of honor. You should actively document feedback from private investors who state that your technology is brilliant but "too early" or "too high-risk" for their mandate. Letters of support from investors stating they will invest, but only on the condition that public funding first de-risks the TRL 6 milestone, are the gold standard for proving non-bankability.

2. Isolate the "Valley of Death" Costs

Be brutally specific in your budget about what the public money will buy. Show that the funds are not for basic science, but for the brutal industrialization phase. Explain that the grant will specifically pay for the CE-marking compliance, the supply chain mapping, and the transition from academic LabVIEW scripts to commercial Python/PyQt architecture.

3. The Catalyst Effect (Crowding In)

Additionality requires proving that public funding acts as a catalyst. Evaluators want to know the endgame. You must draw a clear line showing how a €2.5 million public grant will de-risk the hardware enough to allow you to build "Serial #001." Once that unit is operational in a commercial environment, the risk profile drops dramatically, making the company highly attractive to private follow-on funding or direct industrial acquisition via an asset carve-out.

Reframing the Narrative

Founders often feel embarrassed highlighting the financial risks of their technology. In the context of European deep tech funding, you must abandon this mindset.

Your technology is high-risk, capital-intensive, and unbankable—and that is exactly why it is groundbreaking. By owning the reality of the deep tech Valley of Death, and articulating exactly how public capital will serve as a bridge, you transform your greatest commercial hurdle into your strongest argument for funding.