equity-funding

Vocabulary Word

Definition

'Equity funding' is when a business gets money from investors to start or grow. In return, investors get ownership shares and a say in how the company is run. It's like business crowdfunding.

Examples in Different Contexts

In venture financing, 'equity funding' is sought by startups wishing to exchange equity for cash to grow their business. A venture capitalist might comment, 'Equity funding is attractive for fast-growing startups needing significant investment to capitalize on market opportunities.'

Practice Scenarios

Startup

Scenario:

We're planning some growth initiatives this year that will require significant funds. This includes product development, staff expansion, and marketing.

Response:

Given our expansion plans, equity funding seems the suitable option. It will provide much-needed cash, and the right investors could offer strategic guidance and industry networks.

Business

Scenario:

Our startup is still in its early stages, but we need additional capital to expand, especially for marketing and product development.

Response:

In that case, perhaps we should consider obtaining equity funding. This would not only provide us with the necessary capital but also bring more credibility and valuable connections.