Equity Financing

Definitions

1. Raising capital by selling ownership in the company rather than borrowing money. Equity financing is the default model for venture-backed startups because early-stage cash flows are often too weak for traditional debt.

   In plain English: Raising money by selling part of the company.

   Example: "They chose equity financing instead of venture debt because the business was still too early."

Related Terms

• Dilution
• Deal Room
• Equity Dilution
• External Funding
• Founder Vesting
• Funding Round
• Non-Dilutive
• Option Pool
• Pre-Money Valuation
• Raise
• Round Size
• Secondary Sale
• Startup Funding
• TAM Metric
• Type of Round