Equity financing can be a powerful tool for growing business, but it's not always the right fit. So when does it make sense? Listen to Kirsten Olsen, Managing Director, Head of PWM Private Capital talk about considerations for when equity financing makes sense for your business.
Equity financing can be a powerful tool for growing your business, but it’s not always the right fit. So, when does it make sense? Listen to Kristen Olsen, Managing Director, Head of PWM Private Capital, talk about considerations for when equity financing makes sense for your business.
Transcript
Equity financing can be a powerful tool. But when does it make sense? Equity is often appropriate when you’re scaling quickly and need significant capital to grow. If your business has high growth potential but limited cash flow, equity can help you invest in talent, technology or market expansion – without the pressure of monthly repayments. There are several sources of equity financing: friends and family, angel Investors, are individuals who invest early often in exchange for equity and a hands-on role they’re betting on your vision and on you. Venture capital firms invest larger sums in businesses with high growth potential they bring expertise and connections but also expect rapid scaling and returns, for example a 10 times return on their invested Capital within five to seven years. Private equity typically come in later when your business is more mature. They may buy a significant stake and help restructure or expand operations. Each type of equity investor has different expectations, timelines and levels of involvement. Equity financing is about more than money, it’s about partnership. Make sure your investors align with your mission and that you’re ready to share the journey.
