As you know, starting and operating a business takes money. And one of the many tough decisions business owners must make is whether that money should come from debt or from equity.
Most people are probably familiar with debt, whether from credit cards, car loans or home mortgages. A business loan is no different: You borrow money in exchange for the promise to repay it under agreed-upon conditions. Loans allow a business owner to maintain complete control over a business, but also require regular payments regardless of how the business is doing; they also often require a business owner to put up personal assets as collateral. That's why some business owners decide to raise business capital by securing equity investments in their company.
But what is equity?