If your business needs money to grow, you’ve the option of selling a stake in exchange for investment. Equity finance investors will have a claim on your future earnings but, in contrast to a loan, you don’t pay any interest – nor do you have to repay capital.
Equity finance could suit your business if you have an expansion plan or project that lenders such as banks aren’t willing to support, or if you want to avoid loan payments.
Your journey from startup to successful business could involve multiple rounds of equity financing from different types of investors, e.g. business angels, venture capitalists and private equity funds. Equity finance has two obvious advantages for businesses:
Read about some popular types of equity finance below, but it’s best to register now for full access to all the options available to you.