Equity
Equity
What is Equity?
Equity is the money that is put into your business in exchange for shares. Unlike other forms of financing, it is usually permanent and tends to be the most expensive form of financing. If a third party acquires a 25% equity interest in your business, they will be entitled to 25% of the future earnings and growth in your business for as long as it is in existence.
Where Can I Find Equity?
Equity can be obtained from a variety of sources. The following is just a sample:
- Family and Friends
- Employees, private individuals, clients of professional advisors, suppliers, customers and other parties that have a connection with your business
- Angel Investors
- Venture Capital
- Institutional investors such as pension funds
- Initial Public Offerings (“IPOs”)
Each one of these sources of equity has its own complexities and it is important that you engage a lawyer with experience in securities and in some cases an investment banker. We can connect you with the strategic partners who can help.