Equity Financing

What is Equity Financing?

Equity financing is the process of raising capital by selling shares of a company, thereby giving investors ownership stakes. Startups and businesses use equity financing to secure funds for growth, development, or operations without incurring debt. In exchange for their investment, shareholders receive partial ownership and may gain voting rights or dividends.

Advantages and Disadvantages of Equity Financing

• Advantages: No obligation to repay investors, and potential access to valuable expertise.
• Disadvantages: Dilution of ownership and sharing profits with investors.

Related Terms and Concepts

Venture capital, shares, fundraising, dilution.