When we talk about equity funding, we are talking about selling a piece of your business in exchange for some needed resources, often cash, to continue to advance a business forward. However, how you raise funds varies based on where you are in your journey.
Equity comes in a variety of forms. Here is a post that gives you an overview of the six different forms of equity.
Many businesses are started by more than one founder. Here is how to know if they will be a good fit.
When it comes to bringing on a partner to help fund your business, below is a post that you should consider when it comes to Allocating Equity to Key Startup Partners.
When it comes to funding a new business, some founders can use their Retirement Account.
If you still have a day job, you can even get your Private Employer to Pay Your Start-Up Costs.
Below is a post that describes how a 401k loan can be used to fund your new business.
Most people think that an IRA can only be accessed when you reach 59.5 years of age. While it is a little more involved and has some restrictions, there is a way to convert a traditional IRA into a self-directed IRA and use the assets to fund a business without having to pay a penalty for early withdrawal.
At this point in our equity funding discussion, the founders are the only true investors in the business. As the founder, you are often interested in the cash flow that the business can produce. However, when it comes to product-based businesses, there is often a possibility for outside investors to also get involved. This post makes a clear distinction between smart money and dumb money investors. It also looks at the role of venture capital firms and why, with the exception of some technology companies, they should be avoided.
The following is a post that takes a closer look at the history of Angel Investors and how to locate them.
When the time comes to pitch their business to potential investors, many business owners make unintentional errors.
Bringing on passive investors opens up a can of worms with the Securities and Exchange Commission (SEC) that you need to consider.
Equity preservation is very important in a new small business during the early stages. An important concept to understand is that whenever the risk of failure of a business is reduced, even before its launch, the price of a share of the business increases. A post that makes this point clear comes from the lessons from the Ship of Gold.
