Why Startup CEOs Should Turn to Non-Dilutive Funding?

Take your company to the next level without giving up equity, board seats, or personal guarantees.

One of the most important job requirements of startup CEOs is being active about financing growth while navigating the daily challenging activities of their business.

To fuel growth initiatives, entrepreneurs of early stage startup find themselves navigating a complex number of options available to them.

Those who seek funding through traditional banks, find it difficult to get a loan as banks are very conservative. For a bank, it can be difficult to understand a startup’s growth potential and evaluate risk with new or unproven business models. VCs generally seek companies growing at more than 100% per year. It’s no surprise, then, that startup founders often get lost navigating the morass of finding funding to fuel growth initiatives.

Equity Investments

The funding choices CEOs make today will determine what they can and cannot do with their business in the future. While angel and VC funding tend to be top of mind for early stage companies, grants funding might make more sense at certain times in a company’s life cycle.

Taking on equity investors means giving them seats on the board and conforming to their expectations of how the company should grow; they can limit the CEOs’ control over the business they started.

Non-Dilutive Funds Advantages

Startup CEOs should finance their healthy growing companies with non-dilutive funds to delay or forgo equity rounds. A good alternative for non-dilutive financing is government grants. Such grants can cover the initial costs for research and development of innovative initiatives. Governments are encouraging innovations as they present an outstanding potential for economy growth. They provide “free money” in order to bootstrap the development of new technologies.

Grants empower entrepreneurs to reach their next growth milestone, bring on critical new hires, and get a better valuation that is attractive to VCs.

Grants financing allows founders the optionality of pursuing different funding paths in the future, which is often not possible when founders take VC too early in their company’s lifecycle. As a startup grows and becomes more established, traditional forms of financing – bank financing, angel/VC equity – become more realistic.

To apply for grants please contact us.