Equity Solutions        

Equity financing incurs the greatest risk of all capital on the part of the investor. Equity financiers demand high returns, commensurate with that of risk. There are hundreds of sources for equity financing; so many in fact , that lenders have specialized, and target different industries, or stages of development.

TYPES:

1.     YOUR OWN SAVINGS. It is nearly impossible to start a business without using some of your own personal funds. It is hard to convince someone to take a risk in your idea if you do not. You can generally expect to provide 20% to 50% of the total money required to get the business started.

2.     FRIENDS, RELATIVES, BUSINESS ASSOCIATES. Most businesses get started with a combination of personal funds and those they have raised from other private individuals. They may provide cash, or may back a loan from a financial institution.

3.     VENTURE CAPITALISTS. They invest in a new firm (usually high tech, or innovative concepts) in the hope that be growth they will get a high return on their investment. They usually buy stock, and may insist on having over 50%. They will also put more restrictions on management.