The fbFund grants, announced at the TechCrunch40 conference in San Francisco, will come out of a $10m pot gathered by Facebook's primary backers Accel Capital and The Founders Fund.

"With just a little bit of capital, a company can grow to hundreds of thousands of users," Mr Zuckerberg said.

Growth spurt

Applications - small programs that can be embedded in a user's profile page - have exploded on Facebook in the last four months since the social network allowed outside developers to write programs for the site.

Popular applications include the scrabble game Scrabulous, and the music-sharing service iLike.com.

These applications have added to the popularity of Facebook.

The firm says it now has 41 million active users, whilst some estimates suggest that the site now accounts for 1% of all web traffic.

Mr Zuckerberg said he hopes the new scheme, known as the fbFund, will help continue that growth.

"We're doing this at Facebook to support the ecosystem and help it grow," he said.

The awards will be determined by a panel that includes Mr Zuckerberg, PayPal co-founder Peter Thiel and Accel's Jim Breyer.

"Any application developer can submit their application and a little business proposal to us," said Mr Zuckerberg.

"If we think the project is good we will give a grant for somewhere between $25,000 to $250,000."

The only restriction is that companies must not have taken any venture capital money previously.

Any firm that wins money will not have to give up equity to the fund.

Instead, it asks that they are given first chance to invest in any successful company that sprouts as a result of the grant scheme.

"This is a grant to help these companies get off the ground," said Mr Zuckerberg.