How Hardware Startups Can Cut Costs, Find Funding, and Scale in 2026

How can hardware startups stay competitive in 2026’s changing landscape? The answer lies in leveraging the right resources at all stages of your startup, from building your product, strengthening your company, and finding your market. Here’s what you need to know.

Skip to Section:

• How Can Hardware Startups Reduce Upfront Costs?
• Where Can You Find Support to Build Your Company?
• Should Your Hardware Startup Explore Dual-Use Opportunities?

How Can Hardware Startups Reduce Upfront Costs?

The economic burden of launching a hardware startup is real, but you don't have to shoulder all of it. Numerous companies offer free or heavily discounted programs specifically designed for startups. Taking advantage of these programs can significantly extend your runway.

CAD Software

Cloud-native CAD tools eliminate upfront software costs and expensive workstation requirements.

The Onshape Startup Program offers qualifying startups free access to professional-grade CAD software, which includes built-in PDM, simulation capabilities, CAM, and more.

Simulation (Linear Static, Modal, FEA, CFD)

Testing and validating designs doesn’t require expensive physical prototypes anymore.

SimScale, through a partnership with PTC, is providing Onshape startup users three months of free access to their cloud-native engineering simulation tools for computational fluid dynamics (CFD), finite element analysis (FEA), and thermal simulations.

Ansys also offers a startup program with discounted access to their industry-leading simulation software.

AI and Compute Resources

If your hardware incorporates AI or requires significant computational power, the NVIDIA Inception program provides access to hardware, software, and technical expertise to accelerate your development.

Manufacturing and Prototyping Partners

Beyond software, hardware startups can access significant cost savings through manufacturing partnerships.

Protolabs offers injection molding, CNC machining, and 3D printing services with dedicated application engineers available to discuss design challenges. Protolabs can also bridge the gap to full production, allowing you to outsource manufacturing until you're ready to invest in your own equipment.

Where Can You Find Support to Build Your Company?

Once you’ve laid the groundwork for your product, the next step is building the company infrastructure around it. While AI continues to dominate venture capital headlines, defense technology and robotics are attracting significant investment. According to KPMG’s Q3 2025 Venture Pulse Report, VC investors are prioritizing AI platforms and dual-use technologies that serve both commercial and defense applications. (More on dual-use in the next section.)

What Accelerators and Incubators Serve Hardware Startups?

Startup accelerators and incubators provide more than just workspace and mentorship. Many offer access to design tools (like Onshape), fabrication equipment, and technical expertise that would otherwise be out of reach. Here’s a rundown of some of the best programs for hardware startups:

• Greentown Labs (U.S.): A climatetech and energy incubator that has supported over 675 startups since 2011, which have collectively raised over $12.5 billion. Greentown’s programs provide access to machine shops, electronics labs, wet labs, prototyping space, and a rooftop lab for outdoor testing.
• mHUB (U.S.): At Chicago’s hardtech and manufacturing innovation center, mHUB runs accelerator programs focused on industrial IoT, MedTech, energy tech, and sustainable manufacturing. The program provides support with cash investment, access to 11 micro labs and prototyping equipment, and networking opportunities.
• Newlab (U.S.): An innovation ecosystem that supports startups tackling big challenges in mobility, energy, and materials. Newlab is less of a traditional accelerator and more of a collaborative workspace and community for frontier tech companies. They provide access to prototyping facilities, a network of corporate partners, and connections to manufacturing resources.
• Techstars (30-Plus Locations Globally): One of the world’s most active pre-seed investors, Techstars runs accelerator programs in over 30 cities worldwide. Each 13-week program offers guidance, mentorship, and access to capital. Techstars also has sector-specific programs including ones focused on energy tech, space, sustainability, and more.
• ventureLAB (Canada): A leading hub for hardware and semiconductor startups in the Toronto region. ventureLAB helps early-stage ventures build globally competitive tech companies, with particular strength in AI, medical tech, and semiconductors.

Which VCs Understand Hardware?

Not all VCs understand the unique challenges of hardware startups – the longer development cycles, the capital intensity, the manufacturing complexities. You need investors who get it. Here are firms with deep hardware experience:

• Andreessen Horowitz (U.S.): One of Silicon Valley’s most prominent VC firms, Andreessen Horowitz, or a16z, invests across multiple stages and sectors. While they're known for software and AI investments, they’ve also backed hardware companies and have deep expertise in helping startups scale.
• Entrepreneur First (U.S. & India): EF has a unique model – they’re a talent investor that helps individuals find co-founders and build startups from scratch. You join before you even have a company idea. They bring together cohorts of exceptional individuals (often technical experts, PhDs, and operators), help them find complementary co-founders, and support them in building ventures.
• SOSV and HAX (U.S.): SOSV is a multi-stage venture capital firm that runs several accelerator programs, including HAX, a hardware accelerator. HAX focuses on hard tech and life sciences startups, providing funding, lab access, manufacturing connections (especially in Shenzhen), and industry mentorship. SOSV also runs IndieBio (biotech) and Orbit Startups (space tech).

What’s Working for Other Hardware Startups?

Looking at successful fundraising examples can provide valuable insights for your own journey. Onshape users have secured major funding from market-specific VCs:

• 4AG Robotics landed funding from Astanor Ventures and Cibus Capital for their agricultural robotics technology.
• Verdi secured $4.7 million from SVG Ventures for irrigation technology in May 2025, even during an ag-tech funding slowdown.

Where Can You Find Real-World Advice?

Beyond formal programs and funding, staying connected to the hardware startup community is invaluable.

• The Builder Circle by Pratik is an excellent podcast for hardware entrepreneurs. Hosted by Sera Evcimen, founder of Pratik (a hardware advising and coaching company), each episode features practical conversations with hardware engineers, entrepreneurs, and investors. Think of it as a curriculum for building a hardware startup, covering product development, manufacturing, supply chain, fundraising, and more.

Related blogs:

• 15 Steps Every Hardware Startup Founder Should Take
• The Top Product Design Tips for Hardware Startups
• Jumpstarting Hardware Startup Growth with Onshape
• Why Hardware Startups Need Agile Engineering Tools
• Startup-Ready CAD: How Modern Hardware Teams Build Faster
• Think Like a Startup: How to Attract Venture Capital Investors

Should Your Hardware Startup Explore Dual-Use Opportunities?

As you build your product and company, you’ll also need to identify and pursue the right markets. One emerging opportunity for hardware startups is the dual-use technology sector.

What’s Dual-Use Technology?

Dual-use technologies are products that serve both civilian and military markets. The term applies broadly to most of today’s important technologies – GPS, medical equipment, the internet, agricultural drones that can be adapted for reconnaissance, or autonomous vessels that work in both commercial and defense contexts.

For startups, this means access to substantial non-dilutive capital flowing into defense technology globally, while also balancing both consumer markets and government requirements like the U.S.’ ITAR and EAR.

Does Your Technology Qualify?

MIT's Dual-Use Readiness Levels guide serves as a useful framework for startups evaluating their commercialization potential and readiness to work with the U.S. government.

Where Do You Start?

The U.S. government offers significant opportunities for hardware startups, but knowing where to start matters.

For early-stage startups, the Small Business Innovation Research (SBIR) program is your entry point. SBIR, managed by the Small Business Administration, provides non-dilutive funding to help startups develop innovative technologies with both commercial and government applications. It operates in three phases: Phase I for feasibility and proof of concept, Phase II for prototype development, and Phase III for commercialization. The program is particularly valuable for dual-use hardware technologies where government validation can open both defense and commercial markets.

(NOTE: SBIR authorization expired September 30, 2025. New awards are on hold pending Congressional reauthorization.)

As you mature, you can explore direct contracting through SAM.gov, the central database for all U.S. government contractor information. However, don’t jump into bidding too early. Government contracts require proven track records, compliance infrastructure, and established relationships. Without these, you’ll burn resources on losing proposals. Use SBIR to build credibility first, then leverage those relationships to pursue larger contracts when you’re ready.

What About International Opportunities?

NIF (Transatlantic): The NATO Innovation Fund is a multi-sovereign venture capital fund backed by 24 NATO allies. Unlike traditional government grants, NIF operates as an equity investor, targeting deep-tech startups working on emerging and disruptive technologies with defense and security applications. Focus areas include AI, autonomy, biotech, quantum, space, energy, and novel materials.

What Tools Do You Need?

If you’re pursuing government contracts, you’ll need tools that meet federal compliance standards. Onshape Government is FedRAMP authorized and purpose-built for companies working with the U.S. government. It gives you the same powerful cloud-native CAD capabilities while ensuring you meet the security and compliance requirements for defense contracting.

Stay Agile, Keep Building

The startup landscape is being restructured in real-time. Funding priorities shift, new programs launch, and opportunities emerge where you least expect them. The key is staying agile and taking advantage of every resource available to you.

Don’t let a few rejections stop your momentum. There’s plenty of capital out there for hardware startups – you just need to find the investors and programs that align with your vision. Make full use of the startup ecosystem, from free software to manufacturing partnerships to government contracts.

Your hardware startup can succeed in 2026. The resources are there. Now go build something.