Non-dilutive funding

Non-dilutive funding is capital that does not require giving up ownership: grants and subsidies, R&D tax credits, repayable advances, soft loans, prizes, and government or corporate co-development contracts. Against equity it has one decisive advantage, founders and existing investors keep their shares, and several costs, the money is often earmarked for specific work, arrives on the funder’s schedule rather than the company’s, and comes with eligibility rules, reporting obligations and sometimes constraints on IP or on how it stacks with other support.

For a deep tech company the strategic role is to fund the science-heavy, pre-revenue years that equity finds expensive to price. A well-run quantum company assembles a stack, a federal tax credit, a provincial or national grant, an agency contribution, on top of equity, so that each equity dollar goes further and the dilution per milestone falls. The non-dilutive layer can be the difference between reaching the next technical milestone on one round or needing a bridge.

The modelling discipline is to separate three states of this money and never blur them: received (in the bank, true runway), committed (signed but not yet paid, a receivable with timing risk), and prospective (applied for or hoped for, not runway at all). Tax credits in particular are reimbursed with a lag, often a year or more after the spend, so the cash and the accrual are different numbers. The strongest plans show the non-dilutive stack explicitly, dated and tiered by certainty, rather than folding optimistic grant income into a single runway figure that diligence will immediately pull apart.