Non-dilutive funding is capital that a company receives without the requirement to give up ownership stakes in return. It takes many forms, including grants, crowdfunding, tax credits, and challenge competitions.
This differentiates it from dilutive funding, where capital is gained in exchange for shares of the company. In other words, non-dilutive funding does not dilute the existing shareholders’ percentage of ownership, voting rights, or earnings per share.
The benefit of non-dilutive funding is that it allows entrepreneurs to raise capital without losing control over their company. Funding strategies will usually employ a mix of dilutive and non-dilutive funding; remember to fully evaluate all funding options before making a decision.
These are funds given by governmental bodies, foundations, or corporations to companies, usually to advance a specific goal. They don’t need to be paid back and don’t take equity.
State Challenges and Competitions
Massachusetts’ entrepreneur ecosystem is vast, and there are lots of regional opportunities to pitch your company for cash awards, research grants, etc. Check out our ESO directory and events page to see upcoming challenges and connect with state entities that offer founder support.
Some examples of organizations that produce challenges with awards:
Massachusetts is home to a variety of cutting-edge research and development facilities, or “sandboxes.” These organizations provide a wide range of services supporting the life cycle of validation and testing for digital health companies.
Launched in 2019, the Sandbox Program is administered by the Massachusetts eHealth Institute at the MassTech Collaborative and designed to both support digital health companies in their product development and expand the user base for sandbox environments.
MassVentures invests in deep tech companies at the early stages. It provides venture capital, grants, and business advice to founders who often lack access to this support. They establish long-term relationships with founders, aiding them on their journey from startup to growth company. MassVentures’ investment and grant companies have leveraged over $3 billion in follow-on capital in the last 5 years and employ approximately 10,000 workers in Massachusetts.
MassVentures has many different funding and acceleration programs for different types of companies.
Gust is a global SaaS platform for founding, operating, and investing in scalable, high-growth companies. Gust’s online tools help entrepreneurs start, run, and fundraise for companies and provide deal flow and relationship management for investors. Here’s an interesting overview of why you should consider using Gust as a startup founder.
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