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 startup equity, 'equity financing' refers to the process of exchanging ownership interest for funding. A startup advisor might advise, 'Carefully consider the implications of equity financing on your control over the company before proceeding.'

Practice Scenarios

Business

Scenario:

We need to raise funds for our company expansion. What are our appealing options?

Response:

Equity financing seems a viable way to fund our expansion plans and it may also bring beneficial partnerships.

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.