What is equity financing?
Equity financing offers capital to high growth firms that is ‘patient’ [repayment is not expected in the short term]. In exchange for offering this high-risk capital, a business will offer partial ownership and control of the business to its investors.
What is an investor looking for?
Equity providers look for the following characteristics, among others, in the companies in which they invest:
- An experienced management team - either in the industry or as an entrepreneur.
- Potential high growth in revenue, size, and market share,
- Proprietary technology, patents or other barriers to entry.
- An exit strategy (e.g., going public or acquisition by another corporation) within a reasonable time frame.
What are my investor options?
- Friends & Family: For the initial capital to develop the product/service.
- Angel Investors: To beta test and develop the initial market.
- Venture Capital: To grow the business into new markets.
WBDC Services
- Review and critique business plan and executive summary.
- Coaching Teams: Teams composed of investors and service providers to assist a business in developing their business model and refining their presentation to investors.
Next Steps:
1. Read the downloads on obtaining equity.
2. If you have a business plan and executive summary, you can e-mail them to dporter@wbdc.org for initial review and comments. If you do not have a business plan, go to Develop Your Business Plan.
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