Many startups default to venture capital or angel investment to kick-start growth, but there’s another path that’s worth considering: non dilutive funding. This type of funding allows your startup to access capital without giving up equity, making it an attractive option for founders like you who are looking to retain control and avoid early-stage dilution. Whether you’re bootstrapping an MVP or preparing for a major rollout, understanding your non dilutive options can be a game-changer.

This capital type can come from a variety of sources, including but not limited to:

  • Government programs
  • Research and development tax credits
  • Corporate innovation partnerships
  • Philanthropic foundations

Many founders overlook these options simply because they may not know where to look, or assume you won’t qualify. The non dilutive funding options are more diverse and equitable than ever, especially when your startup provides meaningful solutions to tough problems.

Whether aiming to extend your runway, validate your tech proposition, or accelerate your growth without giving up a piece of your company, this guide will point you in the right direction. 

The 10 Non Dilutive Funding Sources

There are many non dilutive funding sources out there, but for this article, we’re going to go into the following 10 in detail:

  1. SBIR and STTR Grants
  2. State and Local Economic Development Grants
  3. Research & Development Tax Credits
  4. Innovation Challenge & Prize Competitions
  5. Corporate Startup Partnership Programs
  6. University Incubators and Translational Research Funds
  7. DoD and AFWERX Funding Opportunities
  8. Export Grants and Global Trade Support
  9. Philanthropic & Mission-Aligned Foundation Grants
  10. Non-Equity Accelerators & Incubators

Let’s take a closer look at each of these.

SBIR and STTR Grants

One of the most well-known forms of non dilutive funding for tech startups comes from federal government grants, specifically the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.

These initiatives support small businesses engaged in high-impact research and development aligned with federal agency missions. Together, they represent billions of dollars in annual funding, none of which requires that you give up equity.

SBIR and STTR grants are especially well-suited for startups in industries like deep tech, defense, life sciences, and energy; specifically, fields where innovation is critical but also requires large capital investments. The programs offer a ‘phased’ funding structure, which starts with Phase I for companies that have proven early feasibility, followed by follow-on funding for Phase II, which supports product development and commercialization efforts. STTR requires you to collaborate with a research institution, while SBIR allows you to conduct your research and development independently. 

The major advantage of these grants is obvious: free capital without equity dilution. However, they also come with rigorous proposal processes, specific eligibility criteria, and long review timelines. However, when your startup navigates the application process, SBIR and STTR grants can become foundational to your non dilutive funding strategy. 

State and Local Economic Development Grants

State and local governments often offer non dilutive funding opportunities to stimulate economic growth and job creation within their regions. These programs typically provide grants, tax incentives, or reimbursement if your business commits to significant investments and employment expansion in their state or region.

For instance, the Texas Enterprise Fund (TEF) awards performance-based grants to companies considering new projects in the state that are in direct competition with out-of-state alternatives. Eligibility requires projected job creation that exceeds 75 full-time positions in urban areas or 25 in rural areas, with the average wages meeting or surpassing the county average.

Similarly, California’s California Competes Tax Credit (CCTC) (link) offers income tax credits to businesses aiming to locate to or expand within the state. Open to companies of all sizes and industries, the CCTC evaluates applicants based on job creation, investment amount, and strategic importance to the state or region. The program conducts multiple application periods annually, with upcoming deadlines and resources on the GO-Biz website.

Your startup can explore these and other state-specific programs to identify opportunities that align with your growth plans.

Research & Development Tax Credits

The Research & Development (R&D) Tax Credit is a valuable form of non dilutive funding that allows your startup to recoup a portion of your R&D expense through federal and state tax incentives. Historically, these credits only applied against income taxes, limiting their benefit to pre-revenue startups. However, recently legislative changes have expanded your eligibility, enabling you to use the credit against your payroll taxes, which provides a direct cash flow benefit before you reach profitability.

To qualify, your startup must have less than $5 million in gross revenue for the tax year and no gross receipts for more than five years before the year you claim the credit. Eligible activities include developing or improving new products, processes, and software. If you meet these criteria, your startup can offset up to $500,000 annually in payroll taxes for up to five years, totaling as much as $2.5 million in savings.

These savings make the R&D Tax Credit a powerful tool to aid your startup in extending your runway without sacrificing any equity. 

Innovation Challenge & Prize Competitions

Innovation prizes and competitions offer a compelling route to non-dilutive especially if your startup is working on a solution with a broad societal or technological impact. These public and private challenges don’t take equity and reward breakthrough ideas with cash prizes, mentorship, and media exposure. High-profile programs like XPRIZE and the Cisco Global Problem Solver Challenge regularly distribute millions of dollars to early-stage companies tackling complex global issues.

For your startup, the benefits go beyond funding. 

These competitions offer massive visibility, validation from credible institutions, and opportunities to connect with investors, partners, and press. They’re particularly useful if your company is pre-revenue or building awareness in emerging markets. While the application and judging process can be competitive, the upside of capital, credibility, and community makes innovation challenges a strategic piece of any non-dilutive funding mix.

Corporate Startup Partnership Programs

Corporate venture and partnership programs have become an increasingly valuable source of non dilutive funding for early-stage tech startups. Unlike traditional venture arms or private equity shops that seek substantial equity, many of these initiatives offer support through grants, technical resources, and mentorship without that expectation. Programs like Google for Startups and Microsoft for Startups Founder Hub provide access to cloud credits, development tools, marketing support, and expert guidance, all designed to accelerate product development and market entry.

These non-dilutive funding sources are especially attractive for SaaS, AI, and infrastructure startups that rely heavily on cloud computing and developer tools. In addition to helping you reduce ‘burn’ on essential services, corporate programs help you create long-term partnership opportunities with the enterprise-level players in your niche. While these programs may not provide direct cash like a grant, the value of the bundled services and exposure to a global network can be just as impactful, particularly in the early growth stages.

University Incubators and Translational Research Funds

If your startup is branching out from an academic environment or partnered with a research institution, university incubators and translational funding programs offer a powerful path to non dilutive funding. These initiatives often provide access to grant funding, state-of-the-art lab facilities, business mentorship, and industry partnerships without requiring any equity in return. Programs like the NSF I-Corps are designed to help research teams commercialize their innovations, providing training and financial support to validate product-market fit. 

This non dilutive support is particularly well-suited for university ‘spinouts’ and science-driven startups in biotech, materials science, and advanced engineering. Translational research grants can help bridge the gap between the lab and the market by funding prototype development and early customer discovery. For founders connected to academic networks, these programs offer a strategic way to de-risk innovation while building momentum before seeking outside capital. 

DoD and AFWERX Funding Opportunities

Startups developing dual-use technologies (solutions with both commercial and defense applications) should consider DoD innovation programs like AFWERX, the Defense Innovation Unit (DIU), and other military research initiatives as a key part of their non dilutive funding strategy. These programs aim to accelerate innovation by tapping into the startup ecosystem, offering sizable funding opportunities without losing equity. For example, AFWERX runs recurring open solicitations that support agile procurement, helping your startup pilot and scale solutions within the U.S. Air Force and other branches. 

One standout feature of these opportunities is the Direct to Phase II (D2P2) pathway, which allows startups with a working Minimally Viable Product (MVP) to bypass the initial feasibility phase typically required in programs like SBIR. Awards under this model can reach up to $1.8 million or more, making it one of the most substantial forms of non dilutive funding available. These programs are particularly valuable for startups building advanced tech in AI, autonomy, cybersecurity, or energy, all fields where national defense and commercial interests overlap often. 

Export Grants and Global Trade Support

Export grants and trade assistance programs offer a highly underutilized form of non dilutive funding if your startup is eyeing expansion into international markets. These initiatives are designed to help US-based companies expand abroad by covering costs related to your global marketing, trade shows, compliance, and translation. One notable example is the State Trade Expansion Program (STEP Grant) administered at the state level and funded by the U.S. Small Business Administration. If your startup is eligible, you can receive reimbursement for activities directly supporting your global business development.

While these programs may not be at the top of your mind, they can provide critical support during your early attempts to scale globally without requiring any equity or long-term obligations. In addition to financial assistance, many states offer export counseling, trade mission coordination, and connections to foreign buyers. For startups in SaaS, manufacturing, or hardware with international potential, export grants can play a strategic role in de-risking your global expansion.

Philanthropic and Mission-Aligned Foundation Grants

For startups focused on solving complex social, health, or environmental challenges, mission-driven philanthropic capital can be a valuable source of non dilutive funding. Unlike traditional grants tied to government or commercial goals, these foundations support ventures that align with a mission to improve global well-being. These programs often fund early-stage innovations in public health, education, climate, and economic mobility by offering capital without expecting equity or financial return. 

Philanthropic grants are especially well-suited for startups that operate in emerging markets or address underserved populations. While the application process can be rigorous and focused on direct impact, the upside is significant: multi-year funding, credibility, and strategic alignment with global changemakers. If you’re a founder building a purpose-driven company, this non dilutive support helps you bridge the gap between mission and market, and can serve as a powerful launchpad for your future growth. 

Non-Equity Accelerators and Incubators

While many accelerators operate on an equity-for-funding model, many programs now offer non dilutive funding in stipends, services, and mentorship without taking a stake in your company. Organizations like MassChallenge and Founder Institute are examples of non-equity incubators that support early-stage startups through structured programming, investor connections, and access to partner resources. These programs help you refine your business model, build momentum, and access funding pipelines without diluting your ownership. 

The benefits go beyond capital. Participation in a non-equity accelerator can significantly boost your credibility, provide access to experienced mentors, and open doors to conversations with future investors. This option is perfect for validating an idea, gaining traction, or preparing for your first institutional funding round. These programs are low-risk, high-reward growth paths, making them a smart addition to any non-dilutive funding strategy. 

In Conclusion

As we’ve covered, non dilutive funding is far more than a ‘fallback option,’ it’s your distinct strategic advantage. From federal grants and R&D tax credits to corporate programs and philanthropic capital, today’s founders have more options than ever to grow without giving up equity. The key is knowing where to look, which programs best align with your business, and how to position yourself to take full advantage of them. 

But navigating this landscape isn’t always easy. Every opportunity comes with eligibility rules, timelines, and application nuances, and missing the mark can mean leaving significant money on the table. That’s where expert support can make all the difference in accelerating your access to funding and removing friction from the process.

At Gallium Solutions, we help founders like you uncover the right non-dilutive opportunities and build funding strategies that extend runway and reduce dilution. Whether you’re just starting to explore this path or need hands-on support to execute, our team is here to help. 

Book a call today to learn how we can help your startup grow on your terms!

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