Equity Financing
Equity financing is a method of raising capital for a business by selling shares of ownership (equity) to investors, such as venture capitalists, angel investors, or the public through an initial public offering (IPO). It provides funds without incurring debt, but dilutes ownership and control for existing shareholders. This approach is commonly used by startups and growing companies to finance operations, expansion, or new projects.
Developers should learn about equity financing when working in startups, tech companies, or entrepreneurial roles to understand how their company is funded and how it impacts valuation, stock options, and growth strategies. It's crucial for roles involving business development, fundraising, or when considering equity compensation as part of a job offer, especially in early-stage ventures where cash flow might be limited.