Startup funding comes in two forms: dilutive and non-dilutive.

Equity funding is dilutive in that the fundraising reduces the ownership of the founders.

Debt is non-dilutive in that the fundraise doesn’t change the founders’ ownership.

Here’s a list of non-dilutive funding options.

Loans — these tend to be short-term loans from a bank. 

Grants — these are most often acquired from government agencies that make grants to startups to foster innovation.

Rewards/prepay crowdfunding — this generates funding for startups in the form of prepayment for a product to be delivered later.

Licensing — funding comes in the form of licensing the technology to other companies who use the technology in their product.

Tax credits — funding comes in the form of tax breaks, such as an angel tax credit offered by many states.

Factoring — funding comes in the form of short-term loans for manufacturing the product.

Venture debt — a form of loan that uses the startups’ raised capital as collateral.

Subscription-based financing — loans to startups with recurring revenue that use the subscription revenue as collateral. 

Consider these non-dilutive funding options for your startup.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
________________________________________________________________________

Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
For more episodes from Investor Connect, please visit the site at: http://investorconnect.org
Check out our other podcasts here: https://investorconnect.org/
For Investors check out: https://tencapital.group/investor-landing/
For Startups check out: https://tencapital.group/company-landing/
For eGuides check out: https://tencapital.group/education/
For upcoming Events, check out https://tencapital.group/events/
For Feedback please contact info@tencapital.group
Please follow, share, and leave a review.
Music courtesy of Bensound.

Copyright (c) 2025, Hall Martin and investorconnect.org. All rights reserved.

Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.