Equity Financing
December 11, 2013 | | Kris Tabetando | 0 Comment
Equity financing is the process of raising capital for a business by selling shares of that business to investors such as family and friends or private and institutional investors such as an angel investor or venture capital firm.
It involves selling different classes of shares including common stock, preferred stock, and even warrants. Equity financing is different from debt financing in that there is no loan and therefore no scheduled debt payments to lenders. Equity investors are compensated via dividends or proceeds from an eventual sale of the business.