Startups often think funding = giving away equity. But that’s not always the case. If you want to grow without giving up control, non-dilutive funding might be your best friend.
What Is Non-Dilutive Funding?
Non-dilutive funding is capital you raise without giving up equity or ownership in your startup.
You get the money but you keep all your shares.
This is the opposite of dilutive funding, where investors (like VCs or angels) take a percentage of your company in exchange for capital.
Common Types of Non-Dilutive Funding
| Type | How It Works |
|---|---|
| Revenue-Based Financing | Repay a % of monthly revenue until a cap is met |
| Grants | Government or institutional funds, no repayment |
| Startup Competitions | Win prize money or pilot grants |
| Debt/Loans | Borrow capital, repay with interest |
| Crowdfunding (non-equity) | Get support from customers or community |
| Corporate Programs | Funds or credits in exchange for pilots or collaboration |
Why Startups Choose Non-Dilutive Capital
- No equity loss as you retain 100% ownership
- Control stays with you with no board seats or investor pressure
- Faster to access in many cases
- Works well for bootstrapped or capital-efficient startups
- Great for specific uses (R&D, pilots, working capital)
Example (India Context)
You’re a D2C brand doing ₹20L/month in sales. You need ₹50L for inventory and ad spend.
Instead of raising a seed round and giving up 15–20% equity, you:
- Raise ₹50L via revenue-based financing from a platform like Klub or GetVantage
- Repay 6% of revenue monthly until ₹65L is paid
Result? You keep your cap table clean and stay in control.
Non-Dilutive Options for Indian Founders
| Source | Ideal For |
|---|---|
| Startup India Grants | DPIIT-registered or sector-specific startups |
| SIDBI Loans | MSMEs, D2C, early-stage growth |
| BIRAC/DBT | Biotech or healthtech R&D |
| NIDHI PRAYAS | Early tech prototypes (hardware/IoT) |
| Corporate Programs | Fintechs, agritech, healthtech pilots |
| RBF platforms | D2C, SaaS, e-commerce with MRR |
When to Use Non-Dilutive Funding
- You need short-term capital for inventory, growth or R&D
- You’re not yet VC-backable but have steady revenue
- You want to avoid premature dilution before a larger round
- You’re planning a bridge between rounds
- You want to stay bootstrapped as long as possible
Things to Watch Out For
- RBF and loans still need repayment, they’re not “free money”
- Poor margin businesses may struggle with repayment timelines
- Too many repayment obligations = cash flow strain
- Grants may involve reporting or usage restrictions
Final Thought
Non-dilutive funding won’t make headlines but it can make your company stronger.
It’s quiet capital that lets you grow without giving up a piece of what you’re building.
Use it wisely, especially when control, optionality, and founder ownership matter most.