equity-funding-strategy

Vocabulary Word

Definition

An 'equity funding strategy' is a systematic approach a company adopts to secure capital through selling a portion of its ownership. Unlike debt financing, it doesn't require to be repaid but dilutes the owner's share.

Examples in Different Contexts

In investor relations, an 'equity funding strategy' communicates to potential investors how their funds will be used to grow the business. An investor relations manager might explain, 'Our equity funding strategy is designed to maximize shareholder value by targeting investments in high-growth areas.'

Practice Scenarios

Tech

Scenario:

Our developers have done an excellent job, we need to think about a remuneration plan that aligns with our company's long-term goals.

Response:

I agree. We can incorporate an equity funding strategy by offering stocks to our developers.

Business

Scenario:

We need an influx of capital to expand our operations. Maybe we should look into different funding options.

Response:

We should consider an equity funding strategy. This might dilute our stakes, but it's a good way to avoid debt.