How I Raised $1.4M in Non-Dilutive Funding (and What I Learned Along the Way)

Learning to embrace and savor rejection is one of the best things that entrepreneurs can do. Launching a startup is the time to find your ever-optimistic inner child again.
- Alejandro Cremades, The Art of Startup Fundraising

Raising money is the second hardest part of starting a startup. The hardest part is making something people want: most startups that die, die because they didn’t do that. But the second biggest cause of death is probably the difficulty of raising money. Fundraising is brutal.
- Paul Graham

The First Check That Changed Everything

The day I deposited our first check, a $100,000 award from the Bill & Melinda Gates Foundation, marked the beginning of our journey as a viable company. Two years later, we won the Massachusetts Technology Transfer Innovation Grant, and later, an NIH Phase I and Phase II SBIR grant that gave us the runway we needed to develop our prototype.

Through trial and error over six years, we raised a total of $1.4 million in non-dilutive funding. Each award, from small state innovation grants to major federal programs, fueled our growth, validated our technology, and helped us prove that our idea deserved to exist.

In those early days, I went from lead chemist of a four-person technical team to founder and CEO of HydroGlyde Coatings. And there's one truth I learned fast:

Money makes you real.

Funding gives you credibility in your space and the power to execute. Without it, you have an idea; with it, you have momentum.

So how do you begin your own funding journey? How do you secure that first check that validates your idea, helps you grow your team, and turns your research into a product?

Let's break it down.

The Two Main Types of Startup Funding

When you're building a science- or tech-driven startup, most funding options fall into two main buckets:

🧾 Non-Dilutive Funding

Funding that doesn't require you to give up equity in your company, such as grants, awards, and contracts.

💸 Dilutive Funding

Funding that exchanges capital for ownership, such as venture capital, angel investment, or SAFE/convertible notes.

You can (and often should) pursue both. But early-stage deep-tech and life-science founders often start with non-dilutive grants, which can help you prove feasibility and build valuation before talking to investors.

Why Non-Dilutive Grants Are a Game-Changer

Non-dilutive funding, especially federal and state grants, allows you to:

Validate your science before investors demand proof.
Grow your technical team without losing control of your company.
Build credibility through third-party validation.

These programs exist precisely for founders with innovative but risky ideas that might struggle to attract traditional capital.

At HydroGlyde, early grants gave us time to show the world that our concept - a next-generation condom coating aimed at reducing global STI transmission - could work. It took three years to develop a working prototype, and we couldn't have done it without that early non-dilutive runway.

The SBIR & STTR Grants: Where to Start

Two of the most powerful federal programs for startup founders are:

🔬 Small Business Innovation Research (SBIR)

Designed for small businesses taking the lead on research and development.

🧩 Small Business Technology Transfer (STTR)

Encourages collaboration between startups and research institutions (like universities or hospitals).

Both are coordinated by the U.S. Small Business Administration (SBA) and funded by agencies like NIH, NSF, DoD, and NASA.

These programs are competitive, often with success rates below 15%, but the potential payoff is huge.

Phase I awards: up to ~$250,000 to prove feasibility.
Phase II awards: up to ~$1.5M+ to scale and commercialize.

If you're based in states like MA, TX, OR, or CA, look for state match programs that can double your funding if you win a federal SBIR/STTR.

Our Story: Winning the NIH SBIR (on the Second Try)

When we first applied for the NIH SBIR, we didn't get funded. But we learned a lot. On our second submission, we secured the award, and it transformed our trajectory.

Here's what made the difference:

A clear technical strategy.
We mapped out the key experiments that would prove our concept, with detailed methods, milestones, and measurable deliverables.
Defined deliverables and success metrics.
We made it obvious what the reviewers would get for every dollar awarded.
Risk mitigation plans.
We anticipated challenges and proposed contingency paths ("Plan B").
A strong, well-documented team.
Reviewers fund people as much as projects. We showcased our team's expertise and complementary skills.
Evidence of commercial potential.
Letters of support from collaborators and end customers strengthened our case.

Our earlier wins from the Gates Foundation and Massachusetts Innovation programs gave our application extra credibility, showing we could secure and manage funding responsibly.

The Waiting Game: Patience and Perseverance

Submitting an SBIR or STTR proposal is not for the faint of heart.

A full application can take months to prepare and easily reach 75–100 pages, covering every aspect of your science, business model, and impact potential. After submission, expect 3–6 months of waiting before results.

And here's the hard truth:
Most first-time applicants don't get funded.

You'll receive reviewer critiques, and yes, they can be blunt. Many founders are shocked by how harsh the feedback feels after months of effort. But rejection is part of the process.

Each resubmission makes your proposal stronger. Founders who treat reviews as free consulting from experts are the ones who ultimately win.

Remember: grants are not one-and-done. They're iterative. Every round teaches you how to better articulate your value, defend your science, and align with reviewer expectations.

Lessons Learned

After raising over $1.4M in non-dilutive funding and reviewing dozens of SBIR/STTR proposals, here are my biggest takeaways for early-stage founders:

Rejection Is Data
Every "no" is a roadmap to your next "yes." Reviewers' feedback exposes blind spots you didn't know existed. Learn from it.
Credibility Compounds
Start small. Local and state grants build your reputation and make federal reviewers more confident in your execution.
Detail Is Everything
A vague application is a losing application. Reviewers fund precision - detailed methods, clear milestones, and measurable deliverables.
Apply with Intention
Don't force your technology to fit a solicitation. Funders can tell instantly when a proposal doesn't match their mission.
Be Ready to Pivot
Your idea will evolve as reviewers challenge your assumptions. Adapt. The best founders iterate constantly, not just on product, but on strategy.
Perseverance Wins
Our first SBIR was rejected. Our second won. Many founders don't make it that far. The difference is persistence.

Final Thoughts

Fundraising, especially through grants, is a marathon, not a sprint. But the reward is worth it:

You retain ownership.
You validate your technology.
You build a company rooted in credibility and resilience.

When you finally deposit that first check, whether it's $10K or $1M, it's more than money in the bank. It's proof that your idea is real.

And that's where every great company begins.