Beyond Equity: How Non-Dilutive Funding Can Power Climate Innovation
When you’re building a climate start-up, securing funding is both essential and deeply personal. Every pound raised helps bring your mission to life, but it also carries a cost. For many founders, the standard path is clear: raise equity investment, trade ownership for capital, and power forward. But equity funding, while vital, is only one part of the puzzle.
At Sustainable Ventures, we work with climate innovators every day who are exploring a smarter balance: how to access funding without giving up equity. This is where non-dilutive finance comes in, and it might be more powerful than you think.
What is Non-Dilutive Funding (and Why Does it Matter)?
Simply put, dilutive funding involves giving up a portion of ownership in exchange for capital and often strategic support - typically in the form of venture capital or angel investment. While it can bring invaluable support and acceleration, the ability even to win equity-based (dilutive funding) can be contingent upon having other forms of capital ahead of the round - in other words, you need to show traction with non dilutive funding sometimes even to be considered as an attractive investment target. In other words, ND funding helps you unlock equity funding and maintain a larger stake in your business.
Non-dilutive funding allows businesses to access capital without giving up equity, enabling founders to retain ownership and maintain control. For some businesses, this path may eliminate the need for equity funding entirely. For others, it can be a strategic way to strengthen their position and increase valuation ahead of future investment rounds.”
In a sector like climate tech, where breakthroughs often require time, collaboration, and credibility as much as cash, non-dilutive funding can provide exactly the breathing room you need to build something world-changing.
Types of Non-Dilutive Funding Available to Climate Start-Ups
There’s no one-size-fits-all but here are four of the most impactful options we regularly support start-ups in accessing:
1. Grants
Public and private sector grants are an incredibly powerful way to fund early-stage R&D, pilots, and commercialisation.
UK and EU innovation funds (e.g., Innovate UK Collaborative R&D, Global Business Innovation Programmes, General Industrial Research Grants or Investor Partnership Grants) offer six-figure support for start-ups building climate solutions.
Grants are becoming increasingly niche, often themed around very specific sectors and use cases (such as low-emission farming, clean maritime, waste-to-value technologies, or broader deep tech innovations) with regional eligibility requirements frequently applied.
Bonus: Grant funding often comes with validation, partnerships, and a powerful story for future investors.
2. Innovation Loans
Designed for innovative businesses that are closer to market, innovation loans offer a middle ground between grants and traditional lending.
Offered by bodies like Innovate UK, these loans come with low interest rates, flexible terms, and the time you need to validate your late-stage R&D project, which will get you to commercialisation.
They’re ideal for bridging the gap between that last stint of R&D and trading commercially, especially for climate hardware or systems-based solutions.
3. R&D Tax Credits
This is one of the most understated non-dilutive funding streams among early-stage founders, and it's often the most accessible.
If you’re investing in technical development or overcoming scientific/technical uncertainty, you could be eligible for an R&D tax relief rebate.
Depending on your burn and payroll, this can return tens or even hundreds of thousands of pounds per year to your business.
It’s not just for labs or hard tech; software, platforms,or anyone demonstrating “new to world” innovation and scientific advancements can qualify.
4. Commercial & Funding Support (That Doesn’t Cost Equity)
Yes, even some funding support can be non-dilutive. We help climate founders access non-equity resources to improve fundraising outcomes, including:
Fundraising and pitch preparation support funded by public programmes
Innovation challenges (meet the buyer, facilitating commercial trials with real world customers)
Venture development activities usually supported under a grant
At Sustainable Ventures, we’ve helped over 800 founders access the right support, at the right time, without compromising their long-term growth potential.
How We Help: Strategic Matchmaking Without the Equity Trade-Off
Navigating the landscape of non-dilutive funding can be complex. Knowing which grants to apply for, when to claim R&D credits, and whether you’re ready for an innovation loan, that’s where we come in.
As part of our Start-Up Innovation team at Sustainable Ventures, we work closely with founders to:
Identify and access the best-fit funding opportunities for your growth stage
Support application writing and financial modelling where needed
Build a smart funding roadmap that integrates non-dilutive and dilutive strategies
Connect you to customers after you've strengthened your position
Don’t Dilute Too Soon, Or More Than You Need
Equity funding can be transformative, but only when used at the right time and as part of the right capital structure. With the growing availability of strong non-dilutive options, climate founders now have the opportunity to build meaningful value before giving any of it away. If you’re developing a climate solution and want to explore how different funding streams (dilutive and non-dilutive) can work together to support your growth, we’d love to help
