If you want to grow your business quite fast, you may need to raise the required funds through equity finance.
Equity financing involves selling a stake in your business in return for a cash investment. Basically, an investor gives you cash and you give them shares in your business.
There are many plus points to this. There are no loan payments and interest to make. The investor will receive dividends as a share of profits. If the business does not make any profit, then you and the investor will not receive any dividends.
This does mean that the investors do have a vested interest in the success of the business and they should work with you to ensure the business is successful. They often bring with them much more than money. They will bring their experience and contacts needed to grow your business.
The downside to this is that you no longer fully own the business. You therefore may not have full control and be able to make decision on your own. This is dependent on the level of shares that you have given away. You will also not benefit from the full profit, this will be shared amongst all shareholders. However, if following the cash injection the business has been more successful than it would have been without the cash, it maybe that in pound amounts you receive much more than you would have, although a lower percentage.
Equity finance can come from many sources; family and friends, angel investments, venture capital, private equity, crowd funding or Government funds.
Footprints can help you to source the correct equity partner for your business, package the financial reports to support this and introduce you to our extensive panel of investors.