Dilutive, when describing funding, means the investor in your project gets the right to some of your business equity and profits. It is called dilutive because your equity and profits are diluted by their investment. You can set aside some shares to protect them from dilution so that you do not lose ownership of your company.
Example
Examples of dilutive vs. non-dilutive funding include. . .
- Dilutive: Angel investments, venture capital, potentially funding from friends and relatives depending on what arrangement you make with them
- Non-Dilutive: SBIR/STTR, loans, winning a contest (in most cases), personally financing the business
