Securing funding for your startup used to mean engaging with VCs or angel investors, and selling company shares in return for equity.
Over the past decade, however, a broad range of new funding models has emerged. Today’s founders don’t view equity and debt as either/or options. Instead, they see them as complementary tools. When structured thoughtfully, non-dilutive capital can work alongside venture funding to help companies scale more efficiently while preserving ownership for long term value creation.
For startups in asset-heavy sectors looking to grow, non-dilutive funding is considered a smart option and has seen growing popularity.
European startups across the most asset-heavy sectors, deeptech and climatetech, raised €34bn in non-dilutive funding in 2025, according to Sifted data, a steady increase from the €30bn raised in 2024.
One form of non-dilutive funding is equipment finance. Rather than replacing venture capital, this type of funding allows founders to extend their runway and finance expensive, mission critical assets appropriately without deploying more equity in order to do so.
We wanted to fund these assets in a more cost-effective way, rather than using precious venture capital equity dollars.
VC funding is often not best spent on these kinds of assets so whether it’s a smaller startup or a larger enterprise, equipment finance should be used strategically on equipment while saving equity for the company’s growth, advises Adam Spice, chief financial officer at Rocket Lab, an end-to-end space company.
“In the startup environment, you need to focus your expensive equity on things such as R&D and growth. I work with companies in an advisory capacity and I always tell them to find a way to finance equipment and save equity.”
Rocket Lab is a real-world example of how equipment financing can effectively support scaling companies. Trinity Capital provided $120m of equipment financing in the US to support Rocket Lab’s continued growth.
For Spice, equipment finance has been a beneficial option, allowing the company to buy costly but necessary equipment. “It’s harder than you think to get money out of VCs. They will put you through the wringer on every round and this can be a constraint to growing fast,” he says.
“Our business is an extremely capital intensive business and we have to buy a lot of manufacturing equipment, for example 3D printers and milling machines. We wanted to fund these assets in a more cost-effective way, rather than using precious venture capital equity dollars.”
Equipment finance in Europe
As equipment finance and non-dilutive funding gain momentum across Europe, asset managers such as Trinity Capital are working with venture-backed companies that have already secured equity funding and are now looking to pair that capital with structured financing solutions.
The firm aims to educate investors and startups alike with their expansion, says Brian Geraghty, managing director of the firm.
In Europe, it's harder to raise that kind of money. Lots of companies are focused on grants and government support.
“Founders and investors often haven't seen equipment finance available to them or their portfolio companies in Europe. Especially at the scale we offer it. So a lot of conversations I'm having with teams are on the educational side,” he says.
Trinity Capital’s equipment finance can offer startups between €10-150m in funding across capex intensive businesses spanning space, robotics, energy, climate, defence and quantum. In 2025, the firm committed more than €1.5bn in funding to companies across the US and Europe.
While the European funding landscape has historically differed from the US, the region is rapidly evolving. As the ecosystem matures, more founders are exploring how debt products, including equipment finance and venture debt, can help optimise their capital structure.
“We have a lot of companies in our portfolio in the US that have raised over a billion dollars in equity. They can move so much quicker and burn a lot of money to get to where they're going,” Geraghty says.
The strength of your VCs is a predictor of outcomes for businesses, sometimes more so than the product that businesses build.
“In Europe, it's harder to raise that kind of money. Lots of companies are focused on grants and government support. But there is gradually more money coming in and hopefully there's a chance for founders to catch up on what the US is doing.”
A lot of European founders are also unaware that they can apply for venture debt in addition to equipment finance through Trinity Capital.
Spice predicts that equipment finance will steadily become utilised across the continent as a way to finance assets on top of other types of funding.
“We have customers and competitors in Europe and access to VC money is much tighter. The strength of your VCs is a predictor of outcomes for businesses, sometimes more so than the product that businesses build,” he says.
In Europe, there is still a misperception that “debt is bad,” says Lukas Leitner, founding partner at VC firm Drumbeat Capital, especially in venture.
Founders and investors should be asking: how do we accelerate timelines, deploy assets faster, and build bigger, bolder projects without over-diluting?
“No one finances hard assets entirely with equity. That mindset has already proven costly, particularly in climate tech, where first-of-its-kind (FOAK) projects were forced into equity-only financing, an approach that is structurally fragile,” he says.
“Non-dilutive providers are closing this gap, allowing European startups in robotics, energy and agriculture to scale faster, more efficiently and with far healthier ownership outcomes — provided founders are clear about the specific milestone the additional capital is meant to unlock.”
Over the next five years, Leitner hopes equipment finance and non-dilutive funding will move away from “one-size-fits-all” structures.
“This means larger facilities, more specialised instruments like venture debt, equipment finance or project-style financing, and a much smoother cross-border execution in Europe,” says Leitner.
“Founders and investors should be asking: how do we accelerate timelines, deploy assets faster and build bigger, bolder projects without over-diluting? Europe needs deeper, more mature capital markets and a higher tolerance for smart risk.”
