Equity Financing
Equity financing is a process of raising money by issuing stocks. Investors gets shares, which represents ownership in the company, proportionally to the money invested.
Investors have the right to collect dividend in accordance to company’s business results and to sell their stocks on the market.
Equity Financing is similar to debt financing, when the company borrows money from the investors and repay interest on borrowed money.
| Related Terms: Small Business Investment Company-SBIC |