equity-financing

Vocabulary Word

Definition

'Equity financing' is like trading a slice of your company's ownership for money. Companies usually do this when they need funds for their operations or projects. The money doesn't have to be paid back, but the investor will own a portion of your business.

Examples in Different Contexts

In investment strategy, 'equity financing' is a method for companies to access funds while offering investors a stake in the business. An investment banker might note, 'Equity financing allows companies to leverage investor funds for expansion while distributing risk.'

Practice Scenarios

Aerospace

Scenario:

Our technical challenge is clearing, but it's still critical to secure funds for our next generation rocket project.

Response:

With the project's high cost, equity financing could be an effective approach. This could attract investors interested in aerospace innovation.

Tech

Scenario:

Developing our innovative software demands significant capital. We should consider resources beyond our earnings.

Response:

I suggest we explore equity financing. It not only offers the capital we need, but can also bring in valuable expertise and connections.