This piece is an addition to our Research Leader’s Playbook. We realized that (to our knowledge) nobody had unpacked where the money for “misfit research” — work that is a poor fit for academia, startups, or large companies — was coming from. If you are already deep in this world, you probably know all of this already, but it may still be worth a skim in for something that might surprise you.
Funding preferences and situations can change quickly, so if any of this is incorrect or incomplete, please leave a note in the comments!
Unsurprisingly, there is no default way to fund misfit research: support can range from a group of philanthropists starting a new institute, to DARPA running robot competitions, to DAOs funding longevity projects, to VCs funding research projects gussied up as a company.
To get our brains around the funding landscape, it’s useful to divide this funding into non-dilutive (funding that comes without ownership or expectation of financial return) and dilutive (funding that comes with an expectation of financial return and often involves some ownership of an organization). This division is useful because, in broad strokes, non-dilutive and dilutive funding come with very different expectations, evaluation criteria, and “sales” processes.
Be aware that these categories have a lot of fuzziness (like many things in non-traditional research). Several entities, like family offices, do both dilutive and non-dilutive funding; they have their own section. Furthermore, non-dilutive and dilutive funding are not always mutually exclusive: some technology projects get off the ground with a mix of non-dilutive grants from foundations or governments and investments from angel or impact investors. (There are still a lot of gaps in this “messy middle” between pure-public-goods work and profit-maximizing company.)
Below are the major groups in each category and what they're actually funding. The end of this section touches on what to actually do with this information when you’re trying to fund research.
Non-Dilutive Funders
Non-dilutive funding doesn’t come with any expectations of repayment or organizational ownership. This sort of funding is important for research that is a poor financial investment, whether because it will never create capturable value, or has long timescales and high uncertainty. However, non-dilutive funding isn’t just “free” money. Raising non-dilutive funding usually takes significantly more time and effort than the equivalent amount of investment dollars; most funders impose much more process up front and restrictions on how money can be spent.
Foundations: Foundations are organizations with full-time professional staff deploying money that has been set aside explicitly for philanthropic purposes. Foundations can range in size from a tiny org with one or two staff to hundreds or thousands of employees at the largest foundations like the Rockefeller or Gates Foundations.
In aggregate, foundations gave $30B towards research in 2019, which is more than the NSF and comparable to NIH.1 While these numbers are large, the median grant is significantly less than $1M. Even large foundations are usually spending money that comes from the interest on an endowment, so they may have much smaller budgets than you might expect based on the wealth of their founder or size of their endowment.
As of 2025, most research funding from foundations goes towards traditional research. The bureaucracy and processes of most foundations make it hard for them to support non-traditional work. Foundations typically deploy money through program officers who work within tight bounds set by the board of trustees on a yearly basis. Programs often have explicit mandates to work within traditional institutions through graduate fellowships or awards to professors.
There are, of course, exceptions. The now-defunct Schmidt Futures helped a number of ambitious research organizations get off the ground.
Philanthropic Aggregators: Philanthropic aggregators are organizations that use their brand and connections to fundraise for specific projects from wealthy individuals or foundations. Some examples include Renaissance Philanthropy, Founders Pledge, and XPrize. Each philanthropic aggregator has their own process and funding “form factor”: Renaissance Philanthropy creates “philanthropic funds” that they use to deploy grants, while the X-Prize creates prize competitions.
Philanthropic aggregators have funded a lot of non-traditional research. The process of recruiting on a case-by-case basis makes aggregators more flexible than foundations with board-specified programs.
Government Organizations: Government is, of course, a major research funder. The vast majority of government research funding is little-c conservative and intended for traditional PI-driven academic work. However, certain agencies and programs have supported some misfit work work.
DARPA pioneered using Other Transaction Authority (OTA) to run prize competitions like the DARPA Grand Challenge, Urban Challenge, and Robotics Challenge. SBIR (Small Business Innovation Research) grants provide non-dilutive funding towards research-heavy startups. Recently, two British government organizations (ARIA and the Department for Science, Innovation, and Technology) announced that they were funding Focused Research Organizations.
Crowdfunding Platforms: Platforms like Experiment.com enable researchers to raise small amounts of money from a large number of people. Crowdfunding can work for non-traditional projects that have public appeal like a citizen science endeavor to catalog ocean plastics or a team building a field microscope. However, crowdfunding rarely raises amounts more than tens of thousands of dollars, so it’s suited for modest-scale projects or early seed funding.
Dilutive Funders
Dilutive funding can be double-edged: it injects significant resources, but it may steer the work towards shorter-term commercial goals and away from research work or even longer-term commercial goals. Professional investors need to show their investors portfolio growth and exits, which means they need companies in their portfolio to show year-over-year growth, which can be at odds with the uncertainty baked into research.
Angel Investors: Angels are individuals who invest their own money in early-stage startups. Technically, angel investment is driven by prospects of eventual financial return, but some angels think less about whether a startup is a good investment but instead about whether the work would be cool or impactful.
Venture Capitalists (VCs): The main context in which professional venture capitalists fund non-traditional work is (almost by definition) bubbles. When an area is “hot” enough, even professional VC funds put money towards work that has no sense of how it becomes a product or a business. There are also a few VC firms that have different structures, like longer fund lifetimes, that enable them to invest differently from other firms. Some examples of VC funding into research includes most quantum computing companies, Colossal Biosciences, and Physical Intelligence.
Corporate Research: While corporate research has drastically contracted, some large companies with large margins still support exploratory research. As obvious 2025, AI research is an obvious example. Corporations rarely fund nontraditional research – most external research funding goes towards universities primarily as a hiring pipeline. Teams can sometimes carve out a niche within corporate research to develop something ambitious – the team that started the Lean FRO worked at Microsoft Research for a long time.
Corporate Venture: Corporate venture capital arms invest in startups based on the company’s “strategic interest” in addition to pure returns. For example, a car company may invest in a research-heavy battery startup or a chip company may invest in a photonics company long before they have a product. Large companies sometimes acquire and continue to fund organizations that focus more on research than products: Hyundai’s acquisition of Boston Dynamics, for example.
Impact Investors: Some investors are willing to accept lower financial returns in exchange for high social or environmental impact. These investors fund for-profit ventures within some impact area (like climate or health) that don’t fit the profile for normal VC funding because of factors like time scales or capital requirements. This kind of investment is also sometimes called “patient capital” or “concessionary funding.” For example, Breakthrough Energy Ventures (BEV) explicitly operates on a 20-year timeline and invests in risky clean energy companies with the understanding that some may only yield societal benefit without huge profits. In the medical world impact investors sometimes invest in exchange for royalties or revenue sharing rather than explosive startup growth.
Program-related Investments (PRIs): Foundations and Donor Advised Funds (which we will talk more about in the next section) can make dilutive investments out of their endowments that count towards their legal deployment quotas as long as they are mission aligned. Unpacking that jargon: Foundations (but not DAFs) legally must spend 5% of their assets annually; normally this money is deployed as grants, but dilutive investments that are aligned with the foundation’s mission can also count towards that 5%.
Investments with the possibility of a return enable Foundations and DAFs to fulfill their charitable missions without eating as much into their bank accounts. This upside means that PRIs that do happen are often larger than normal grants and theoretically people with DAFs and Foundations should be excited to do them. However, the potential for IRS scrutiny, divisions between investment and granting teams, and DAF sponsors that don’t support PRIs means that they are fairly rare.
Two words of caution about funding research-heavy work with dilutive alternatives to venture capital:
While PRIs and impact investors explicitly fund work that struggles to raise VC funding, they often focus on work that can’t raise VC funding because of characteristics like timescales, capital requirements, and market sizes, not because they are too research-heavy.
Most dilutive funding puts an organization on a trajectory where they do need to raise venture capital eventually. Many misfit research projects will never be a good fit for venture capital, so raising dilutive funding can be a trap.
Both
These entities can (but do not always) do both dilutive and non-dilutive funding.
Decentralized Autonomous Organizations (DAOs): DAOs are communities that pool funds for a common purpose by selling blockchain-based “tokens” that give their owners a say in the organization’s governance. Some DAOs, like VitaDAO or CerebrumDAO focus on research. DAOs fund work through many different mechanisms — both traditional grants and dilutive funding as well as newer blockchain-based mechanisms for capturing some of the value that the work could create.
High-Net-Worth Individuals (HNWIs): Wealthy individuals sometimes bankroll research personally. Individuals have the most flexibility of any funders to do unconventional things. As a result, a lot of non-traditional research has been funded directly by individuals. HNWIs often fund things quietly and make themselves hard to contact for obvious reasons: everybody would be asking them for money and funding strange things can open people up to reputational risk.
Family Offices: Family offices are professional organizations that handle the money of a wealthy individual or family. The big thing that differentiates family offices from foundations is that they don’t have a pile of money that has been explicitly set aside for philanthropy. Instead, they have multiple mandates – increase wealth, hedge against risk, maintain liquidity, and do philanthropy.
Keep in mind that people and organizations can have completely different focuses, mindsets, and processes whether they’re doing dilutive or non-dilutive funding: a wealthy individual who will write a million dollar check to a startup the same day might only donate $10k at a time only to projects focusing on a specific disease.
http://arxiv.org/abs/2206.10661