The equity financing (insert financing) is the supply of own capital funds by that or the owners, whereby the funds flow to the enterprise from outside. Equity financing is thus own and external financing at the same time. It takes place always at the establishment of an enterprise, in addition, later in the context of capital increases.

Means of the equity financing are capital paid in, Sacheinlagen and rights. Last the two represent however an evaluation problem.

Regarding the persons, who apply own capital funds, two possibilities exist: 1. The past partners increase their insert and and/or oder2. new partners join the circle of the past partners by their insert.

The financial sources receive a requirement right at the profit, at the fortune and at the liquidation proceeds during the equity financing in principle. The moreover one they are of the enterprise risk, which can be limited depending upon legal form to the height of the insert. Besides the financial sources attain information, say and rights to share in decision making. The capital hiring duration is in principle long-term, can be also short term however - at Einzelunternehmungen and unincorporated firms (depending upon contract design) -.

Articles in category "Equity financing"

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• CCH Business Owner's Toolkit | Equity Financing
  Equity financing explains how your form of business organization can be used to bankroll your business, and the advantages and disadvantages of using ...


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  Debt vs. equity explains how the two basic forms of financing differ, and how you can combine them to the best advantage for your small business.


• SBA - Managing | Financing: Equity Financing
  Most small or growth-stage businesses use equity financing in a limited way. As with debt financing, most of the time additional equity comes from ...