Non-Dilutive Funding Options

Want to know where to go for non-dilutive funding options? This checklist has over 20 alternative sources to venture capital for founders.

The common perception of most founders is that their only startup funding option is to raise venture capital. While this is the primary route you'll need to go down to raise the large sums you'll need if you want to scale quickly, there are increasingly more non-dilutive financing options you can tap into.

This checklist from Edition has more than 20 of those sources. It includes revenue and other requirements for these sources, and how to apply.

Some of the non-dilutive sources

One thing to keep in mind is generally these non-dilutive sources will need you to have significant revenue in order to qualify. So, if you are pre-revenue, likely your primary options will be angels/VCs and equity funding.

Some of the sources included in this checklist:

Pipe

SaaS-focused platform, where startups with $100k+ ARR can get loans against future revenue, starting at $25k.

Feenix Venture Partners

Venture firm that does venture debt as well as hybrid (debt and equity) investments in B2C growth startups. Their debt investments have no equity dilution.

PodFund

Specifically targeted at podcasters, this fund lends $25k - $50k to help them grow their podcasting and media businesses.

Non-dilutive funding
Questions about non-dilutive funding

FAQs

What is non-dilutive funding?

Non-dilutive funding is capital that doesn't require you to give up ownership of the basis. Whereas with angels and venture capital investors, you are selling equity, hence diluting your ownership stake, non-dilutive funding takes no equity or ownership stake.

What are the types of non-dilutive funding?

There are a few different types of non-dilutive funding:

  • Grants - Often issued by government agencies to achieve specific scientific or research objectives
  • Rewards-based crowdfunding - Websites like Kickstarter or Indiegogo
  • Factoring - Where business sell their invoices/accounts receivable for upfront capital
  • Revenue-based financing - Upfront capital in exchange for some percentage of the ongoing revenue
  • Venture debt - There are several types of venture debt, but usually, they are term loans

Most of the sources provided in the checklist are revenue-based, or factoring structures.