Nondilutive

Non-dilutive funding refers to capital that does not require issuing additional equity, thereby preserving the ownership percentage of founders, employees, and existing shareholders.

Common sources include government grants, research subsidies, competitive prizes, corporate sponsorships, and certain tax incentives or credits that reduce the net cost of a project without exchanging ownership. In addition, revenue-based or royalty-based financing arrangements may be considered non-dilutive because repayment is tied to future revenues rather than equity issuance, though terms vary and some forms may involve royalties or milestones.

Non-dilutive funding is often contrasted with dilutive financing, such as equity investments or convertible instruments, which dilute ownership proportional to the amount invested. Non-dilutive funding can be attractive for early-stage teams seeking to conserve control and extend runway without giving up stakes. However, it may come with restrictive use-of-funds requirements, reporting obligations, competitive application processes, or milestones that must be met.

Eligibility and terms are highly contingent on program rules, sector, and geography; many programs require matching funds, documentation, or impact metrics. Understanding the tradeoffs is important for startups and researchers seeking capital without equity dilution.

Prominent examples include government programs such as national research grants and innovation initiatives, as well as tax credit schemes and other policy-driven incentives designed to support R&D and commercialization without equity involvement.