Struggling to find funding to CE mark your medical device? These grants can help.

In the dynamic landscape of the European Union, funding can make or break success for startups at their earliest stages. Finding sources of non-dilutive or public funding like grants is especially beneficial to those trying to make ends meet. 

In Particular, startups often grapple with the challenge of securing funds for research and development (R&D) and regulatory compliance. As the startup ecosystem evolves, so do the opportunities for funding, particularly through grants. Some might not know this, but grants are not only pivotal for innovation but can be used by medical device companies to reimburse resources used for regulatory compliance and acquiring their CE mark.

We at Formly had an opportunity to chat with nxt milestone, who support German startups with an expert team to help prepare grant strategies for the entire journey of each individual company they work with. Nxt milestone has generously offered to help us in providing some background information on what kinds of grants are available to startups in Germany and what to pursue based on your needs.  

Layers of Grants in Germany

In Germany, startups can access grants through three distinct layers: state, national, and EU-level grants. Each layer offers unique opportunities tailored to different stages and needs of a startup’s development.

State-Level Grants

Each German state offers a variety of grants, many of which are specifically designed to support medical device startups. For example, the GründungsBONUS in Berlin provides up to €50,000 in general grant money. This funding can be used to cover essential expenses such as regulatory certifications or intellectual property rights, enabling startups to secure the necessary credentials to enter the market.

National Grants

At the national level, Germany offers several grants that can significantly benefit R&D-focused startups. A prominent example is the Forschungszulage, a grant widely utilized by companies engaged in research and development. This grant stands out because it allows for cost reimbursement for up to four years retrospectively. With the Forschungszulage, up to 35% of eligible R&D costs can be reimbursed, providing substantial financial relief and enabling startups to invest more in innovation.

EU-Level Grants

The third and final layer comprises grants directly allocated by the EU. 

One notable example is the EIC Pathfinder, which offers 100% financing for projects up to €4,000,000. To access this funding, startups must apply as part of a consortium that includes at least two other members from EU or associated countries. This collaborative approach not only enhances the project’s credibility but also fosters international partnerships and knowledge exchange. The technology readiness level (TRL) has to be between 1-4.

The EIC Accelerator targets projects at a more advanced stage compared to the EIC Pathfinder program. They typically focus on projects with a start TRL 5-7 and don't require a consortium. The program offers a blended finance model, combining a grant, up to €2.5 million, and equity investment, up to €15 million.The EIC Accelerator is a wonderful opportunity that should be combined with the next funding round for medical device startups.

Budgeting for CE Marking Compliance

The best part about applying for these grants is that they aren’t only for regulatory compliance but can be allocated to it. What does that mean? If you save money on your solution for regulatory compliance, the excess money can be allocated to other critical projects within your company. 

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In order to set yourself for reimbursement of your regulatory compliance costs, the first thing to do is to budget appropriately for what the costs will be. You will need to set up your quality management system (QMS) and your technical documentation for your device. There are a lot of resources available for this but the most common approaches are:

• Do it yourself: A lot of startups try to create their QMS and all their technical documentation themselves. Usually this consists of buying or downloading templates online, buying the standards, and hashing it out into the night with your beverage of choice. While this approach is possible - it takes MUCH more time and drains your resources more than you will think. 
• Hire a consulting firm: Most companies have ended up at this option, some after making an attempt at doing it themselves. Consulting firms will very likely get your company and device through to market, but, they will take a lot of time and a LOT of money to do so. Paying over 50K€ and taking 6+ months to get a Class I device on the market isn’t unheard of here. 
• Use new approaches like Formy: Ok - shameless plug here - but our approach to creating a QMS and your technical documentation allows you to write all of your processes and documentation 10x faster and more affordably than paying expensive consultants or trying to figure it out yourself. Plus, we have experts to support you anytime you’re lost along the way. In the end, you get to use all that money you just saved on CE marking for things that matter more in your company.

Costs can run wild when you try to do it yourself or hire consulting firms since the time to complete the work being done can be somewhat unpredictable. It is important to try and fix your agreements with consulting firms to a project based approach and be transparent with budget in your first meetings. 

Most often we see a hybrid approach to compliance, writing documentation with internal teams where possible and using a consultant when it is impossible not to. For this, a budget of at least 20K€ is a good starting point depending on how much domain knowledge and resources your internal team has to dedicate to the CE marking process.

With Formly, we only charge you a transparent one-time fee so it is clear from the beginning exactly how much your costs will be to get your CE mark.

Which Grant Should You Apply For?

Pre-seed and seed startups with some funding but pre-market should focus on grants that support these crucial early stages. Here's a breakdown to help you choose:

• State Grants: Ideal for initial expenses like regulatory certifications (e.g., Berlin's GründungsBONUS).

• National Grants: Excellent for R&D-focused startups (e.g., Germany's Forschungszulage with retrospective cost reimbursement for up to 4 years).

• EU Grants: Well-suited for ambitious projects and international collaboration. Depending on the TRL level and willingness to build a consortium, the EIC pathfinder and accelerator are great choices.

Do Some Grants Require Existing Funds?

While most grants don't require upfront capital, some programs might require "matching funds." This means you'll need to demonstrate that you have other financial resources to cover a portion of the project's costs.  These matching funds could come from various sources, such as:

• Investment: If you've already secured funding from investors or you have a letter of interest (loi), you can use that to demonstrate your financial commitment.

• Positive cash flow: If your startup has a positive cash flow from revenue, this can also count towards matching funds. (This option is usually not feasible for early med tech startups)

• Loan agreements: Having a secured loan agreement in place can satisfy some grant programs' requirements for matching funds. Often, grant institutions offer matching loan programs.

How to Apply for Grants?

Navigating the grant application process can be confusing and partnering with a consulting company like nxt milestone often significantly increase your chances of success without costing you much in the end.

While applying for grants on your own can potentially save costs, it is often time-consuming and has a lower success rate due to the lack of expertise in grant writing and strategic planning.

Here's how nxt milestone can assist you throughout the process:

1. Identifying the Right Grant Program:

nxt milestone will thoroughly analyze your startup’s needs, goals, and eligibility to match you with the most suitable grant opportunities. They have extensive knowledge of state, national, and EU-level grants, ensuring you apply for the ones that align best with your business.

2. Drafting Application Documents:

The team at nxt milestone will handle the preparation of all necessary documentation, including your business plan, financial statements, and project proposal. They will highlight your startup’s innovation, market potential, and the impact of the grant funding.

3. Filing the Application:

nxt milestone ensures that your grant application is completed accurately and submitted on time. They are familiar with the specific guidelines and requirements for each grant, which helps avoid common mistakes that can lead to rejection.

4. Administrative Support:

After submission, nxt milestone continues to provide support by managing the administrative part of the grant program that your startup got accepted in, ensuring you receive your grant money on time.

By taking over the full process, nxt milestone allows you to focus on your core business activities while leveraging their expertise to increase your chances of securing essential funding. Their professional approach not only saves you time but also enhances the quality and competitiveness of your grant application, making them a valuable partner in your startup’s journey.

Ready to secure the funding your startup needs? Contact nxt milestone today to get started on your grant application process and take your business to the next level.