Speedinvest Blog

We Mapped Non-Dilutive Funding in 25-Plus European Countries

August 3, 2023

Securing funding is a critical part of starting and growing any business. Whether it's a budding startup with ambitious goals or an established company looking to expand its operations, access to capital can make all the difference. 

Navigating the complex landscape of different funding sources can be a daunting challenge. Despite its potential to fuel growth and innovation, VC funding is not the only path available to startups and should be a very conscious choice because it also comes with many specific expectations and trade-offs for founders. 

Fortunately, many non-dilutive funding options are available in Europe for digital health and technology startups. Non-dilutive funding refers to money that a company can receive without giving up any ownership. So let’s explore what those options are and what external factors there are that are beyond the control of the startup itself that can impede the path to securing VC funding.

Going beyond traditional funding options

Example of non-dilutive funding instruments in Europe (full map below)

In the ever-evolving world of entrepreneurship, securing venture capital funding is often seen as the lifeline for innovative startups and visionary projects. However, the path to obtaining such funding is not without its challenges. We've summarized the key obstacles that can impede traditional VC funding in the image below.

Health non dilutive funding options graphic

Non-dilutive funding can provide critical capital especially in the riskiest and earliest stages of development. In addition, most of these instruments have experts with domain knowledge that conduct thorough reviews of projects. Thus, obtaining non-dilutive funding provides important validation of the technology, which can also strengthen the confidence of future investors. 

Non-dilutive funding can also be very interesting to secure on top of an equity round. This setup can enhance the startup's overall financial stability, providing a valuable buffer during periods of market volatility or unexpected challenges. By strategically combining both dilutive and non-dilutive funding, entrepreneurs can streamline fundraising efforts, while retaining more autonomy in decision-making.

So what are the most common types of non-dilutive funding? 

Types of non-dilutive funding

  1. Grants: Funds awarded to businesses or individuals for specific purposes, projects or people from specific backgrounds. These are usually issued by governments, non-profit organizations, startup accelerators or foundations. 
  2. Competition Awards: Funds awarded to businesses or individuals for winning competitions, contests, or challenges, typically organized by incubators, startup ecosystem players, universities, and governments. 
  3. Incubators and accelerators: Programs that provide support, mentorship, and funding to startups for a fixed period of time. Some can request equity while others request a small fee. For more on that, check out our comprehensive collection of startup accelerators and incubators for health tech in Europe.
  4. Tax credits and Visas: Funding and visas provided through government tax credits or incentives, such as research and development tax credits, that can be offset against a company's tax liability and provide additional cash flow.
  5. Innovation loans: Funds provided to businesses with an agreement to repay the loan amount, usually with interest, over a specific period of time. 

What should I do to apply for non-dilutive funding? 

There are a few things you should keep in mind when applying for non-dilutive funding. We’ve compiled a list of things to consider below.

  1. Research: If you’re reading this article, it means you’re already halfway there! Keep on top of the geographical or thematic funding bodies most relevant to your startup, tracking their latest calls and deadlines. Many funding options  come with strict eligibility criteria and guidelines for how the funds can be used. Make sure that you understand these and any future requirements and restrictions  that come with the funding. 
  2. Application process: Crafting grant application documentation can be a very time consuming and daunting process. But the chances are, synthesizing your vision and business plan may prove helpful regardless of the application outcome and you may also be able to reuse a large part of the documentation in future fundraising.  
  3. Grant management: Non-dilutive funding often comes with compliance and reporting requirements, but don't let that scare you off! Make sure you understand these requirements and have the capacity and necessary processes and team in place to meet them. 
  4. Support: Last but not least, grant consultancies (some of which operate on success fee basis) may help with many of the aspects above: matching you to the right funding, helping you draft or review the application, as well as supporting you with ongoing grant management. This can be an interesting option, especially for those applying for larger grants for the very first time. 

Ok enough with the talking, here’s what you’ve all been waiting for. (Please accept all cookies to ensure that the table below is viewable.)

Non-dilutive funding options in Europe

Want more updates on our portfolio? Sign up for our monthly newsletter and follow us on LinkedIn.

From The Blog

Deepfake Detection: Separating Fact From Fiction

Speedinvest's Anne Roellgen deep dives into deepfake detection technology and separates fact from fiction with insights from Parya Lotfi, Mark Evenblij, Dr. Bernd Pichlmayer, and Dr. Alexander Godulla.

How To Build an AI-Enabled Marketplace in 3 Steps

Speedinvest's Sameer Singh breaks down how to build an AI-enabled marketplaces in three steps with exclusive insights from Ronan Harvey-Kelly and Pete Flint.

The Benefits of Coaching for Early-Stage Startup Founders

Professional coaching is one of those investments many startup founders view as a ‘nice to have,’ but it’s often not a priority. Dr. Tünde Erdös shares the benefits of professional coaching and why founders should make it a priority.