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Equity Financing

The term ‘equity’ refers to the capital invested in an enterprise by its owners. Equity capital is a permanent source of finance and the entrepreneur is under no obligation to repay the equity. To that extent, it is a ‘risky’ of the investor on the entries. However, equity results in shoring of the ownership with the investors. For a start-up entrepreneur accessing equity capital may be a difficulty task as the risk involved for the investor is higher. However with increased credibility and enlarging business proposition, it becomes easy for then entrepreneurs to attract equity capital.

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