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Understanding Cascade Funding: 4 Essential Elements for Success!


Discover the secrets of Cascade Funding and enhance your innovation journey. Explore how Cascade Funding works, all its benefits and how to stay informed about funding opportunities. Dive into a world of interconnected innovation with these essential elements.

Funding plays a crucial role in the success of any project or venture, be it a business startup, a nonprofit initiative, or a research endeavor. It’s the fuel that empowers dreamers, visionaries, and pioneers to transform their ideas into reality. While traditional funding methods like grants, loans, and investments are well-known, there’s a relatively new approach gaining momentum in various sectors: Cascade Funding.

In this blog post, we’ll delve into the concept of cascade funding. Our goal is to provide you with a deep understanding of cascade funding by breaking it down into three fundamental elements, offering valuable insights into its profound significance and untapped potential.

1st Element. The Concept: What Is Cascade Funding?

According to the European Commission official information, Cascade funding, also known as Financial Support for Third Parties (FSTP), is a Commission mechanism to distribute public funding in order to assist beneficiaries, such as start-ups, scale-ups, SME and/or mid-caps, in the uptake or development of digital innovation.

This innovative funding approach seeks to streamline administrative processes, fostering a simplified and SME-friendly application structure. It empowers select EU-funded projects to initiate open calls for additional funding, drawing inspiration from the successful model employed in the Erasmus student program.

The European Commission first introduced this pioneering scheme within Horizon 2020, the Framework Programme for Research and Innovation (2014-2020). At its core, cascade funding involves a domino effect where funding flows from one EC funded project to another, creating a continuous, interconnected flow of support. This dynamic chain reaction doesn’t just move financial resources; it propels knowledge, expertise, and resources from one project to another, nurturing an ecosystem where collaboration thrives and innovation flourishes.

Thus, Cascade funding is a novel funding model designed to support innovation and research activities across Europe.

2nd Element: How does it work?

Cascade Funding Mechanism

With a clear understanding of what cascade funding entails, it’s time to explore the mechanics that make this funding model tick. Delving into ‘How does it work?’ provides the practical insights you need to know the operational framework of cascade funding, unraveling the stages and mechanisms that drive its success:

    1. Call for Proposals: The European Commission issues a call for project proposals, that includes the management of Financial Support to Third Parties in a specific field or area of interest. These proposals are evaluated based on their quality and alignment with the program’s objectives.

    2. EU Project Implementation: After the evaluation process, a set of projects are selected for funding. This is where cascade funding differs from traditional models as part of the funding must be re-distributed following a Cascade Funding approach.

    3. Resource Redistribution: As the selected projects move into the execution phase, the consortiums responsible for these projects are tasked with launching open calls for proposals. These calls invite third parties to participate, offering them access to a portion of the allocated budget. These third parties, responding to the conditions laid out in the call, are responsible for developing and implementing their own projects.

    4. Third parties project execution: The third parties, who have secured funding through the open calls, proceed to implement their respective projects. Their performance is critically evaluated, with a keen focus on deliverables and the successful achievement of Key Performance Indicators (KPIs). Beyond financial support, the third parties also have the opportunity to access additional assistance, such as mentoring, coaching, or various support services, to further enhance the chances of their project’s success.


In essence, cascade funding encourages a ripple effect of innovation, where collaboration and the efficient use of resources play pivotal roles in propelling multiple projects toward success. This method of financing fosters an ecosystem and network where progress is not confined to the individual but thrives through collective efforts, transforming ideas into impactful outcomes.

3rd Element: Benefits of Cascade Funding

Cascade funding offers several advantages that make it an attractive option for funding innovative projects:

  • Streamlined Processes

    Cascade financing streamlines the often-convoluted application, evaluation, and justification procedures. It cuts through bureaucratic red tape, ensuring a more efficient and accessible pathway for innovators.

  • Higher Success Rates:

    One of its key merits lies in significantly higher success rates. As these calls are often less saturated and "popular," innovators stand a better chance of securing funding to materialize their vision

  • Flexible Funding Spectrum

    The financial support under cascade funding is versatile, spanning from €10,000 to €300,000. Among these, projects typically falling within the €50,000 to €150,000 range are the most prevalent, catering to a diverse array of innovative endeavors.

  • Equity-Free Support

    Importantly, cascade funding typically entails equity-free financial support. This means that innovators can access vital resources and capital without relinquishing any equity or share capital to external entities.

  • Comprehensive Support Ecosystem

    Beyond mere financial backing, most cascade programs offer a comprehensive support ecosystem. This includes invaluable perks such as free incubation and acceleration services, specialized mentoring, and unparalleled access to international networks of contacts.

  • Knowledge Transfer and Technological Adoption

    Cascade funding not only fuels innovation but also actively facilitates the transfer and exploitation of knowledge and the adoption of cutting-edge technologies. It empowers innovators to harness the latest advancements, driving progress at an accelerated pace

4th Element: How to Engage in Cascade Funding

Now that we’ve explored the concept and benefits of cascade funding, let’s discuss how you can get involved:
  • Stay Informed: Keep an eye on funding opportunities in your area of interest. Subscribe to newsletters, follow relevant organizations on social media, and join networking events or forums to stay up-to-date. Consider using resources like the Sploro Cascade Funding section, where there is a list of current opportunities monitored daily.
Subscribe to the Cascade Funding Alerts Now!
  • Form Collaborative Partnerships: To maximize your chances of receiving cascade funding, consider forming collaborations with other projects or organizations. Highlight the potential for resource sharing and mutual benefits in your project proposals.

  • Prepare Strong Proposals: Just like with traditional funding, your project proposals must be well-prepared and aligned with the goals of the funding program. Clearly demonstrate how your project can contribute to the cascade effect.

  • Embrace the Ecosystem: Once you receive cascade funding, actively engage with other projects in the network. Share your resources, knowledge, and expertise, and be open to receiving support in return.

Conclusions

Cascade funding represents a promising shift in the way innovation and research projects are funded. By fostering collaboration, resource sharing, and a dynamic ecosystem, cascade funding not only accelerates progress but also promotes resilience and sustainability. To harness its benefits, individuals and organizations must actively engage in this exciting model, embracing the interconnected nature of innovation in today’s world. So, keep an eye out for cascade funding opportunities, and get ready to be part of a transformative network of innovation.

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