Financial Strategy: Dilutive VS Non-Dilutive

I just got off a call with an amazing entrepreneur. The team is fantastic, the product is killer, the market is on fire... and she says she wants to raise funds. My first question: how much in equity and how much in debt? And she stutters, "debt... what?"

So, no choice, I have to write a piece on this. We’re going to talk about financing in the broadest sense, starting with non-dilutive and ending with dilutive options.

First Way to Finance: Revenue

Don’t forget, the best way to find money is to generate economic value. Go get those customers! 😉

Second Way to Finance: Grants and Public Support

At the very beginning of your project, if you're in a region that supports entrepreneurship, look for grants and innovation contests that can give you a bit of cash.

If your project is sexy and you’ve got a real product-market fit, create a detailed deck and adapt it slightly for each contest – but don’t spend too much time on this.

Third Way to Finance: Tax Credits

This doesn’t bring in money but stops it from going out. 😜 If you’re doing real innovation, you might be eligible for research tax credits. These credits usually apply to payroll, which can be a big plus.

Fourth Way to Finance: Bank Loans

Yes, yes, even for you, young tech entrepreneur... and this is the exact point that made me want to write this article! It’s a largely underutilized lever that can double your raise.