Equity-free funding for deep tech startups is the cheapest capital a founder will ever raise, and the most misread. A reactor, a sensor or a bioprocess needs years of engineering before the first paying customer. Every euro or dollar of that runway sold as equity at lab stage is sold at the lowest valuation the company will ever see. Grants, prizes, fellowships and R&D contracts let you buy technical evidence without selling ownership.
But equity-free is not condition-free. Some programmes demand matched funding. Some take cost share. At least one well known "grant" carries a right to buy shares later. This guide sorts the main programmes in the United States, Germany and Singapore by stage, and flags the catch in each one.
We write from the builder side. EX EPIC finances, patents and deploys breakthrough science, with a EUR 160M+ capital track record, 24 patent families filed and 200+ energy units deployed across 11 countries. Public money has been part of that stack from the start. So have its conditions.
What equity-free really means in deep tech
Four kinds of money sit under the label, and they behave differently.
- Grants pay for a defined scope of work, with budgets, reporting and sometimes cost share.
- Prizes pay for a result or a pitch, with fewer spending rules but often their own strings: relocation, a lease, a programme you must join. OpenGrants draws exactly this line, and it is the right first filter.
- Fellowships fund a person rather than a project, usually a stipend plus a research budget.
- R&D contracts from defence and space agencies pay for deliverables, and come with data-rights terms that matter later.
The practical test is simple. Ask three questions of every programme. Does anyone get shares, now or at the next round? Do I have to bring matching money? Who owns the IP the money creates? A programme can answer "no shares" and still fail the other two.
United States: the deepest pool of non-dilutive money
SBIR and STTR
SBIR and STTR are federal R&D set-asides for US small businesses, run through 11 agencies, with no equity taken. Phase I tests feasibility. Phase II builds the prototype. Phase II is open only to Phase I awardees, so the first award is the gate to everything after it.
The size of the cheque depends on the agency, but there is a ceiling. As of April 2026, agencies may issue a Phase I award up to $323,090 and a Phase II award up to $2,153,927 without SBA approval. Above that, a waiver is required.
STTR has the same structure with one difference that matters for spinouts: it requires a formal university or nonprofit research partner. If your technology still lives in a university lab, STTR is the natural door. The SBIR catch is work share. The small business must do the bulk of the work, and the principal investigator must be primarily employed there. A professor who keeps a full-time chair and runs the company on the side does not qualify as PI under SBIR.
NSF America's Seed Fund
The National Science Foundation runs the most sector-agnostic version of SBIR, and the one most deep tech founders start with. Under the current solicitation, Phase I proposals may request up to $305,000 for 6 to 18 months and Phase II up to $1,250,000, typically over 24 months. NSF expects roughly 180 SBIR Phase I awards a year. That number is the honest picture of competition: real money, finite slots.
ARPA-E and the mission agencies
ARPA-E, ARPA-H, DARPA and the DOE offices fund higher-risk work against a government mission. The awards are larger. So are the strings. ARPA-E cooperative agreements require cost share for most for-profit applicants, with milestone-based go/no-go reviews. Cost share is not equity, but it is cash you must raise from somewhere, and that somewhere is often an investor. Plan the private round and the agency award together, not in sequence.
Activate Fellowship
Activate funds the founder rather than the company. Fellows receive a $100K living stipend per year, $100K in R&D support and $12K a year for travel and development over a two-year programme. Eligibility is narrow on purpose: at least four years of post-degree research or engineering experience, a hardware-based technology, a first-time hard tech founder, full-time commitment and the right to work in the US.
The equity answer is clean. Activate takes no fees and no equity, and actively encourages fellows to apply for SBIR/STTR and raise private capital alongside the fellowship. That makes it one of the few programmes designed to stack rather than compete with the rest of this list.
Germany and the EU: grants built for spinouts
EXIST Forschungstransfer
EXIST Forschungstransfer, run by the Federal Ministry for Economic Affairs and Energy, is the German programme built for research-intensive spinouts that already have a proof of principle. It runs in two phases, and they behave very differently.
In Phase I the team is still inside the university or research institute. EXIST funds up to four staff positions plus up to EUR 250,000 in material costs, including patent costs, for up to 18 months, extendable to 36 for demanding projects. Universities can be funded at 100 percent, institutes of Fraunhofer, Helmholtz, Max Planck and Leibniz at up to 90 percent.
Phase II is where the catch sits. The new company can receive a non-repayable grant of up to EUR 180,000, capped at 75 percent of costs, but only if founders bring their own funds or investor capital in a 1:3 ratio, up to EUR 60,000. No shares go to the state. Shares may well go to the angel who supplies the match. Read Phase II as an equity-light round, not an equity-free one.
Note what Phase I pays for: protective rights. A grant that funds the patent filing is a grant that funds the asset the next investor will price. Our patent strategy for deep tech startups covers how to time that filing against a long development clock.
EIC Pathfinder and the EU stack
At the earliest research stage, the European Innovation Council offers Pathfinder grants of up to EUR 4 million, plus EUR 50,000 booster grants to test commercial potential. The 2026 Pathfinder Open budget is EUR 166 million, with no predefined themes.
Further up, the EIC Accelerator blends a grant with optional equity from the EIC Fund. That is where "equity-free" stops being the default in Europe. We map the full ladder, from Pathfinder to EIB venture debt, in our guide to EU funding for deep tech startups, so we will not repeat it here.
Singapore and Asia: read the equity clause
Singapore is the clearest example of why the label needs checking. Startup SG Tech, run by Enterprise Singapore, funds deep tech commercialisation in two tracks: up to S$400,000 for Proof-of-Concept and up to S$800,000 for Proof-of-Value, released against agreed milestones.
It is called a grant. It also gives Enterprise Singapore (or its nominee) the right to subscribe to shares equivalent to 50 percent of the awarded amount, up to 49 percent of the shareholding, exercised at a qualifying equity round. On a S$800,000 award, that is a S$400,000 equity right sitting in your next term sheet. It may still be excellent money. It is not equity-free money, and your cap table model should show it.
Eligibility is also local by design: Singapore incorporation within ten years, at least 30 percent local shareholding and core R&D carried out in Singapore. For a foreign team, that is a structuring decision, not a form field.
For founders anywhere, Singapore also hosts one of the few prizes with no geographic restriction. SLINGSHOT 2026 offers a S$400K grand prize and is open to startups registered anywhere within the past ten years. Prize money of that size, with no shares attached, is worth a serious application.
Prizes, fellowships and microgrants for the earliest stage
Before the agency programmes, there is a layer of smaller, faster money. It rarely funds a prototype. It often funds the evidence that wins the bigger grant.
University programmes are the most overlooked source. The muon imaging spinout mDetect received $30,000 in equity-free seed funding through Swinburne's Elevate programme, filed a patent on its first detector design in 2019, and later closed a $1 million seed round. The sequence is the lesson: small grant, protected IP, then priced equity. If you are still deciding how to spin out a company from a university, ask the tech transfer office what internal proof-of-concept money exists before you talk to anyone outside.
In Europe, the current open calls include Women TechEU at EUR 75,000 per women-led deep tech startup, and the EUIPO SME Fund reimbursing 75 percent of national and European patent fees up to set caps. The second one is small and boring. It is also free money aimed directly at the asset that makes a deep tech company fundable.
How to sequence equity-free money: the operator view
Match the instrument to the evidence you need
Each award should buy the proof the next funder will ask for. A common US path runs from customer discovery to SBIR Phase I, then a prize or fellowship to bridge the gap, then SBIR Phase II or an ARPA-style award. The European equivalent runs from an internal university grant to EXIST or Pathfinder, then into the EIC Accelerator.
The mistake we see most is applying for whatever is open this month. A Phase II style grant without Phase I evidence wastes six months. A prize without a prototype wastes a pitch. Write the milestone first, then pick the programme that pays for exactly that milestone.
Protect the IP the grant pays for
Grant money creates results, and results create IP. Before you sign, read who owns it. US defence contracts carry data-rights terms. University-hosted grants such as EXIST Phase I sit inside the institution, so the licence or assignment to the new company has to be negotiated. Our separate guide to university spinout funding covers how that negotiation interacts with the first equity round.
An investor at Series A does not pay for grant reports. They pay for protected technology, a team and a path to deployment. Equity-free money that leaves you with a strong report and a weak patent position has bought the wrong thing.
Where a venture builder fits
Grants fund evidence. They rarely fund the operating team, the manufacturing partner or the first deployment in a market that is not the funder's home country. That gap is why a deep tech venture builder exists. EX EPIC's model wires public funding, protected IP and operator teams together, so the work a grant pays for lands in a company that can ship it. Our portfolio's 200+ deployed units across 11 countries were not built on grants alone. But grants bought a share of the evidence, at no cost in ownership, before equity priced what that evidence was worth.
The rule we apply is short. Take every euro of equity-free money that fits the milestone. Model every clause that turns it into equity, match or cost share. Then raise equity on the evidence, not on the hope.
FAQ
Can a non-US startup apply for SBIR funding?
Not directly. SBIR and STTR fund US small businesses, the work must be done mainly by that business, and the principal investigator must be primarily employed there. Foreign founders usually qualify by setting up a genuine US entity with US-based R&D and a US-employed PI. Foreign-affiliation disclosures apply on several agency programmes.
Is Startup SG Tech really equity-free?
No. Enterprise Singapore holds a right to subscribe for shares worth 50 percent of the awarded grant at the next qualifying equity round. There is no cash cost upfront, but it should appear in your cap table model from day one.
Can I combine grants with venture capital?
Yes, and the best programmes expect it. Activate encourages fellows to raise private capital and apply for SBIR alongside the fellowship. EXIST Phase II requires founder or investor money as a condition. The constraint is not the combination but double funding: the same cost cannot be claimed twice.
Do grant-funded patents belong to my startup?
It depends on where the work happened and on the funder's terms. Work done inside a university under a hosted grant usually produces university-owned IP that must be licensed or assigned to the company. Agency contracts can grant the government data rights. Check ownership before the first euro or dollar is spent.