Equity financing is a useful tool that can you can use to help grow your business. In this type of financing, you would sell shares of your company to raise money for it. You may choose to sell these shares to your friends and family, to investors, or to sell them in an IPO, or initial public offering. It may also be helpful to consult with an accounting firm like Brown Smith Wallace LLP prior to doing equity financing.
This type of financing is different than debt financing, which is when a company sells bills, bonds, or notes to investors to gain capital. Unlike debt financing, equity financing places no holds or restrictions on the company’s activities. There is also no obligation to pay back the money that you have earned through equity financing either. In debt financing, you must pay back the money that you’ve earned over time with interest.
In this article, I’ll be going over 8 ways equity financing can grow your business, and hopefully, by the end of this article, you’ll have the information necessary to decide whether or not equity financing is the right move for you and you company.