Equity Investments

An equity investment is the purchase or investment of equity in a business by a third party.  This kind of financing requires that the owners of the business give up a percentage of ownership in the business.  If you’re not willing to let investors take some ownership of your business then equity inventors would not be a good option for your business financing needs.  These investors often can provide a young company much more capital than other forms of business financing can offer.  Since the risk if often on the higher end the cost of capital can get expensive when you consider the longer term value of the lost equity. 

When an equity investment is in infant companies, it is often referred to as venture capital investing and is generally regarded as a higher risk than investment in listed going-concern situations.  It’s common for these investors to receive a loan payment monthly or quarterly with an equity share provided up front or at the end of the loan.  It is sometimes referred to as an “equity kicker”, when the equity is provided as part of the loan / investment structure.  Sometimes the loan is not paid back, but the equity investor receives a percentage of ownership and is paid a percentage of profit.  If the business does well, it could be a substantial amount of money.

The businessfinanceapp.com portal contains equity investors such as: mezzanine financing, venture capital, hedge fund lenders, investment bankers, angel investors, and royalty financing.  These lenders have solutions for all kinds of equity investment needs across just about all industries.  They all take on high risk and look for high yielding opportunities to offset the higher risk levels.

Equity Investors to Avoid

Some equity investors want you to guarantee some return on their investment even if the business does not make it or does poorly. Unless all other options have failed and you’re desperate for the cash, avoid an investor who wants a guarantee. It's just too much risk for a person starting and operating a small business.  If your investors want that high rate of return if you succeed they need to assume some risk.

Ready to get a quote for an equity investment by a reliable equity investment company?  Simply complete the no cost, no obligation quote form on the right side of the page.

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