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What You Should Know About Equity Financing

 
  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
   
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  Article Summary  
In our last article, we talked about debt as one of the two main ways that businesses can receive an outside cash infusion. The other way is by selling ownership shares in the company to outside investors, which is known as equity financing. Here, investors (usually venture capitalists, private equity firms or “angel” investors) provide money in exchange for shares of ownership in the business.

This article looks at equity financing with discussions of when to consider it and a review of the types of equity investments—angel investors, venture capitalists and initial public offerings—along with reviews of their related benefits and other considerations.

It can be difficult for Los Angeles and Southern California CEOs and CFOs to know which type of financing—debt or equity—is the best option for their company. Bringing in an outside expert can sometimes help, since he or she can look at the situation objectively and through fresh eyes. If you need help determining which type of financing is the best choice, you may want to talk to an outsourced CFO services provider who can offer specific guidance for your situation.

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