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Equity is a method of financing your business where:

Examples of Equity Finance

Seed funds

Equity funds

Venture capital funding

Angel investment

Equity Crowdfunding

Tier I Entrepreneur equity funding

Government regional equity funds

Sector specific equity funds

Government backed co-investment funds

Pros and Cons of Equity Finance


  • You may get a funder that not only invests but also can add to the business in terms of experience/ skills / contacts
  • As the investment isn’t a contractual debt – there is no contractual obligation to repay the funder.
  • You don’t secure the funding against company assets allowing other forms of finance to use that security.
  • You may have to give security against the debt – personal guarantees
  • As there is no interest rate it should make the purpose for which the investment was made more -profitable


  • You have to sell a share of your business to get the funding
  • The legal costs of acquiring the finance are generally greater than when raising debt finance
  • You may not find an equity funder to finance small amounts of investment
  • The time it takes to raise the finance is generally longer than when raising debt finance


Types of Business Finance and Funding