Non-dilutive financing is the type of capital acquisition that does not require you to give up shares of your business – like grant from one of the federal departments or agencies.
In my more than 25 years in the hi-tech community, I have learned that failure to know when and how to get non-dilutive capital can mean the loss of millions of dollars in profits going into the pocket of an entrepreneur. By raising non-dilutive financing first, founders would have been able to sell their shares later at a higher valuation, allowing them to raise more money by selling less equity.
Non-dilutive financing should be a central instrument to leverage statups R&D and market value.
Typically, when we discuss federal grants, most of the federal agencies refer to 3 types of research:
Basic research
Applied research
Advanced technology development
Non-dilutive source of money - grants - provide the greatest diversity of opportunities, and cumulatively the largest source of funds for supporting companies R&D costs. These grants range from small-scale seed grants, to large-scale, multi-year grants to support most of companies R&D costs.
