Equity Financing

It is the process of raising capital through selling shares. A company might require money to cover the bills or invest in something new; a way of acquiring that money is by selling shares, effectively selling ownership in their company, for cash.

Equity financing can come from investors, the three Fs (family, friends and fools), or an IPO (initial public offering). An IPO is a process that private companies undergo to offer shares from their business to the public, in a new stock issuance. Public share issuance allows a company to raise capital from public investors. Industry giants, such as Google and Facebook, raised billions in capital through IPOs.