Dilutive Funding vs. Non-dilutive Funding: What is the difference

  • December 23, 2019

There are two kinds of funding, primarily speaking. Neither option is necessarily better or worse, but the question of which type is right for you and your business is a very personal choice.

We are referring to Dilutive vs. Non-dilutive funding, of course.

Until the moment funds are required desperately for business growth, many entrepreneurs have never explored the key differences between one and the other. 

Dilutive funding

Dilutive funding is funding that costs equity to receive. One example of dilutive funding is capital from Venture Capitalists (VCs) and Angel Investors. Both of these types of funding rely on the business trading varying amounts of equity for the funding they receive. Whenever something must be traded from the company to receive funds, the funding is classified as dilutive.

Non-dilutive funding

Non-dilutive funding does not require any equity from the company to be awarded. Examples of non-dilutive funding include grants and -awards from contests. Non-dilutive funding is awarded to companies based on meeting certain criteria and applying for funding that has already been allocated for specific purposes or types of organizations.

The best way to learn about all your options for both dilutive and non-dilutive lines of funding is to partner with a consulting agency like us. We can evaluate what kind of #non-dilutive #funding you may be eligible for and share information about some of the most highly rated VCs and Angel Investors in your relevant field or geographical location that may be able to provide #dilutivefunding.

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We assist our clients in locating, applying for, and evaluating the outcomes of non-dilutive grant funding. We believe non-dilutive funding is a crucial tool for mitigating investment risks, and we are dedicated to guiding our clients through the entire process—from identifying the most suitable opportunities to submitting and managing grant applications.