What are the disadvantages of equity financing?

[Good-Person]

Financing a business is one of the most important things you need to do. One of the most common ways to finance your business is equity financing. It refers to a process where you may sell the shares of a company. You may earn cash doing so or you may liquidate the shares for a loss. So, what are some disadvantages of this kind of financing?

 

[Heatman]

Equity financing is all about selling some of the shares of your company or business to either your new business investors or pre existing shareholders for the purpose of raising money. This doesn't make you to give up the control or ownership of your business. The only disadvantage that I see in using equity financing as a way to generate funds is when you over sell what you're not meant to, you may lose bigger control in your business.

 

[Good-Person]

Equity financing is all about selling some of the shares of your company or business to either your new business investors or pre existing shareholders for the purpose of raising money. This doesn't make you to give up the control or ownership of your business. The only disadvantage that I see in using equity financing as a way to generate funds is when you over sell what you're not meant to, you may lose bigger control in your business.

I think that equity financing is done almost each and every day in many different kinds of stock exchanges around the world. This is because share markets consists of buyers and sellers who buy and sell shares daily. Most of the sellers might be the kind of investors who may need to sell shares in order to start a new business.

 

[Kane]

Equity financing is when you put your money into someone's business and company. When you are investing in other people's business, you will have to depend on other people for earning profits and these people might not always be genuine and not always make profits, so you might be at a loss.