Raising Funds Without Dilution
Introduction
When it comes to startup financing, equity fundraising isn’t the only option. If you want to non-dilutive fundraisingkeeping full control of your capital while boosting your cash flow there are effective solutions. This article reviews 4 essential non-dilutive funding levers designed especially for fast-growing tech startups.
Why Raise Funds Without Dilution?
Fundraising is often seen as essential for scaling. But giving away too much equity too early can hurt your long-term position. By maintaining maximum control, you: protect your governance, retain decision-making power, better position your startup’s valuation for future rounds.
1. Honor Loans: Early-Stage Boost
Les Honor loans are zero-interest loans, usually with no personal guarantee, granted to founders to strengthen the company’s equity.
2. Public Innovation Funding
If your project is innovative, there are many public support options—grants, repayable advances, and preferential-rate loans.
- Where to look first:
- Bpifrance: innovation grants, Deeptech Development Aid, Innovation Loans, etc.
- Regions & local authorities: regional calls for projects, EU funds (FEDER, etc.)
- France 2030: strategic program supporting future technologies
- Why we like them:
- Often combinable with other funding sources
- Can represent tens or hundreds of thousands of euros
- Strengthen your financial plan without giving up equity
3. JEI Status: Tax Boost for Innovative Startups
The Young Innovative Company (JEI) status grants eligible startups significant tax and social charge exemptions for several years.
- Key Benefits:
- Employer social charge exemption (up to 100% in year 1)
- Corporate tax exemption for the first years
- Available to companies under 8 years old with significant R&D activity
- Why you should consider it:
- Immediate impact on monthly cash flow
- Simple to access if you’re well-advised
- Fully compatible with CIR / CII
4. Research Tax Credit (CIR) & Innovation Tax Credit (CII)
Les These tax credits are major tools to recover part of your R&D or innovation expenses.
- Numbers to know:
- CIR: up to 30% of R&D expenses refunded
- CII: up to 20% of eligible new product development expenses
- Eligible expenses include:
- Salaries for engineers, technicians, and developers
- Depreciation of R&D equipment
- Subcontracting, technology watch, etc.
- Why guidance matters:
- CIR and CII files are technical. Poor handling can lead to tax reassessments. They must also be well coordinated with other public funding.
Navigating the Non-Dilutive Funding Jungle
The Non-dilutive funding can be complex—full of acronyms, technical criteria, and administrative delays. Yet, it’s one of the best ways to boost your cash flow while keeping control of your company.
- At Flag, we help you:
- Build a clear funding roadmap (equity + non-dilutive mix)
- Identify the best programs for your startup
- Manage applications without taking your focus away from your product
- Connect with our network of public and private funders, plus investors
Conclusion: Raising Without Dilution Is Possible
You don’t have to give up equity to finance your growth. With the right tools, timing, and guidance, non-dilutive fundraising becomes a powerful growth lever.
Ready to take action? Contact us now to build your non-dilutive funding roadmap.
Not sure where to start? Reach out, we’ll walk you through it.
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