equity financing
Equity financing refers to selling equity in your company in exchange for money. Some companies are structured to make this process easy from the beginning and others are not. While most C-Corporations are inherently set up to be able to easily handle equity investment, LLCs and S-Corporations are not necessarily structured this way. Equity financing is usually considered more expensive than debt financing because equity represents a perpetual claim on the company's value whereas debt generally has a finite claim that can be retired. Also equity financing will result in dilution. For these reasons, many entrepreneurs try to self-fund first, then raise debt financing, and turn to equity financing last.
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