Growing more and more popular thanks to the rise of the tech industry, equity fundraising is a form of financing wherein you don’t have to pay back the investment capital you receive. Instead you sell an ownership stake in your company in exchange for funding.
If available, this is a great option for limiting personal financial risk. It’s an especially good option if your business needs some runway before becoming profitable, as there will be no pressure to repay loans.
Some places to seek out equity fundraising include:
- Venture capital firms
- Investment banks
- Angel investors
- Family and friends
Of course, equity fundraising does have its downsides. When you sell shares in your company, you’re giving away control to investors who may have a different vision than you do. Make sure that anyone buying shares believes in your vision, is trustworthy, and has good intentions for the direction of your venture.