If you’re a digital health founder, funding doesn’t have to mean giving up equity.
While most headlines focus on VC raises and unicorn valuations, a growing number of early-stage startups are tapping into non-dilutive funding—capital that doesn’t cost you cap table real estate.
Grants, competitions, government programs, and strategic partnerships can offer critical runway, validation, and visibility without handing over a single share.
In this guide, we’ll break down:
- What non-dilutive funding actually is (and isn’t)
- Where to find it—globally
- How digital health startups can qualify
- The hidden benefits beyond capital
What Counts as Non-Dilutive Funding?
Non-dilutive funding is any form of capital that doesn’t require giving up equity or taking on debt. Common examples include:
- Grants (government, academic, foundation-based)
- Startup competitions (especially those with prize money or in-kind support)
- Accelerators (non-equity programs like MassChallenge)
- Research contracts or SBIR/STTR grants
- Corporate innovation challenges
It’s not just “free money”—you usually have to jump through serious hoops. But if you’re in healthcare, those hoops often align with your validation roadmap anyway.
Why Non-Dilutive Funding Matters in Digital Health
- You keep control. You don’t lose board seats or voting rights.
- You de-risk future rounds. Non-dilutive wins show traction, reduce burn, and validate the science—making your next raise easier.
- You gain credibility. Winning an NIH grant or placing in a well-known challenge builds reputation with payers, providers, and investors.
- You fund essential milestones. From clinical trials to regulatory strategy, you can cover critical costs without rushing into a priced round too early.
- You get non-financial value. Many programs come with mentorship, intros, and even pilot opportunities.
Key Sources of Non-Dilutive Funding
1. Government Grants (U.S.)
NIH SBIR/STTR
- Ideal for early clinical development and digital health R&D
- Up to $275K (Phase I), $1M+ (Phase II)
- Highly competitive, but highly respected
BARDA
- Supports pandemic preparedness, diagnostics, and emerging threats
- Often includes digital tools that support public health infrastructure
NSF SBIR
- Broader than health, but health tech companies do qualify
- Great for novel technologies with commercial potential
Tip: Use the NIH RePORTER to see what kinds of projects get funded.
2. European Programs
Horizon Europe
- EU’s flagship R&D funding program
- Focus on innovation, clinical impact, cross-border collaboration
EIC Accelerator
- Blends grant + equity, but has non-dilutive paths
- Geared towards disruptive innovation
Local innovation agencies (e.g. Innosuisse, Bpifrance)
- Often overlooked but highly founder-friendly
- Region-specific—great if you’re based or expanding in EU markets
3. Non-Profit Foundations & Health Agencies
Gates Foundation, Robert Wood Johnson Foundation, Wellcome Trust
- Focused on global health, chronic disease, maternal care, and health equity
- Look for aligned calls for proposals (RFPs)
CDC Foundation, WHO Innovation Hub
- May fund pilots, data platforms, or population-level digital tools
4. Accelerators with No Equity Requirement
- MassChallenge HealthTech (Boston)
- MedTech Innovator (Global)
- DayOne Accelerator (Switzerland)
- KidsX (Pediatric digital health)
These programs often connect startups to payers, providers, and systems—plus grants, pilot sites, and PR.
5. Corporate Innovation Challenges
Many pharma, medtech, and insurance giants now host startup competitions with:
- Cash prizes
- Pilots or proof-of-concept opportunities
- Joint development deals
Look at:
- Bayer G4A
- Novartis Biome
- Astellas Digital Health Challenges
- Anthem Digital Incubator
Pro tip: even if you don’t win, the exposure can lead to biz dev conversations.
How to Stand Out When Applying
- Don’t just pitch an app—pitch an outcome. Grants fund impact, not interfaces.
- Make your science credible. Reference evidence. Outline your validation path.
- Understand your reviewer. Academics want rigor. Payers want cost savings. Foundations want mission alignment.
- Be clear, not flashy. Keep language accessible. Most reviewers aren’t startup-native.
- Meet deadlines early. Many grant systems are clunky and punish last-minute uploads.
Final Thoughts: Build Optionality Into Your Funding Path
Non-dilutive funding isn’t just a way to delay dilution—it’s a strategic advantage in a complex ecosystem.
If you can:
- Fund your first pilot
- Validate your tech clinically
- Build relationships with hospitals or agencies
…all without raising a priced round, you’ve already won.
In a space where trust, access, and evidence move the needle, non-dilutive capital may be the most underrated weapon in your war chest.
Want more tactical guidance? Read:
He has invested in startups including American Well, Neuronation, Mimi, and most notably mySugr – which was recently acquired by Roche. Min-Sung is also a contributing writer for mediums including TechCrunch and Tech.EU and studied Business Economics at Witten/Herdecke, Harvard, St.Gallen, and in Seoul.