What is non-dilutive funding?

Non-dilutive funding is capital a company raises without giving up equity or board control — the opposite of dilutive funding (venture capital, angel investment), where investors receive shares in exchange for cash. Grants are the clearest example: the U.S. Small Business Administration itself describes programmes such as its Manufacturing USA institutes as awarding "non-dilutive funding to develop your technology," with no ownership stake taken in return.

Grants are not the only form. R&D tax credits, prize competitions, revenue-based financing and conventional debt are all non-dilutive in the strict sense — none of them takes equity — though debt still has to be repaid and revenue-based financing takes a cut of revenue, so "non-dilutive" is a narrower claim than "free" or "risk-free." The trade-off runs the other way for grants specifically: they preserve 100% of your ownership, but they are competitive, capped in size relative to venture funding, and come with reporting obligations most equity investors do not impose.