One of the biggest challenges of business ownership is starting the business itself. You have to be able to raise money to not only begin operations but ensure that they're carried out on a regular basis. Robert Jain, as well as other names in finance, will agree, which brings us to the topic of equity finance. If you're looking to start your own business venture, here are some important questions to ask about equity finance.
"What is equity finance?" According to reputable names on the matter like Bob Jain, equity finance is the process of raising money for business, not through one's own efforts or borrowing from close relatives, but with the help of investors. The idea is that investors will buy company shares in exchange for percentages of what said company makes. As a result, they become business owners in their own individual regards.
"What types of equity financing are there?" It's important to note that equity financing can be broken down into different subtypes. Angel investors are wealthy individuals that invest money for the sole purpose of seeing a high return on investment. Family financing, hence the name, is the act of borrowing money from family members looking to support their loved ones' business endeavors. These are just a few categories to make note of.
"What are the benefits of equity financing?" One of the standout benefits to note is that it doesn't take a tremendous financial burden on the company. Since entrepreneurs aren't putting any of their own money in, they can apply their resources elsewhere. They also don't have to worry about repaying the money acquired through this method. These are just a few upsides to make note of.
"What should I be wary of when it comes to equity financing?" This method of financing isn't without its potential downsides, and some may stand out more than others. For example, you may not want to take the time to research investors. It's also possible that you'll end up struggling to work with said investors down the road. You should know what you're getting into so that you end up making the best decisions for your business endeavors.
"What is equity finance?" According to reputable names on the matter like Bob Jain, equity finance is the process of raising money for business, not through one's own efforts or borrowing from close relatives, but with the help of investors. The idea is that investors will buy company shares in exchange for percentages of what said company makes. As a result, they become business owners in their own individual regards.
"What types of equity financing are there?" It's important to note that equity financing can be broken down into different subtypes. Angel investors are wealthy individuals that invest money for the sole purpose of seeing a high return on investment. Family financing, hence the name, is the act of borrowing money from family members looking to support their loved ones' business endeavors. These are just a few categories to make note of.
"What are the benefits of equity financing?" One of the standout benefits to note is that it doesn't take a tremendous financial burden on the company. Since entrepreneurs aren't putting any of their own money in, they can apply their resources elsewhere. They also don't have to worry about repaying the money acquired through this method. These are just a few upsides to make note of.
"What should I be wary of when it comes to equity financing?" This method of financing isn't without its potential downsides, and some may stand out more than others. For example, you may not want to take the time to research investors. It's also possible that you'll end up struggling to work with said investors down the road. You should know what you're getting into so that you end up making the best decisions for your business endeavors.
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For additional insight about equity finance, kindly consult Bobby Jain.. Free reprint available from: Equity Finance Questions Answered By Robert Jain.
