The basics of capital funding

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Capital funding is something that business owners are familiar with. It is the money that equity holders and lenders provide to help grow a business. In the past, people only knew of equity funding as a source of capital for businesses. But as times have changed, new entrepreneurs have more options on how to increase the capital of their company.

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Equity funding

Equity funding is a term that refers to any means of financing a business, in which the owner receives money in exchange for issuing the lenders with shares of their stock. Equity funds also include seed financing.

Seed financing is an amount of money a business needs in its early stages to get started. Businesses that seek seed funding are usually still in their conceptualization stage. These companies need small capital to cover their operation expenses until they start earning. Seed money is also a good tool to attract bigger investors. Normally, seed money comes from investors that are personally close to the business owner. They may be from friends, family members, or small angel investors.

Debt funding

Debt is something people borrow that they have to pay back. Whether the company is making a profit or not, they must pay their debts on time to avoid bigger charges.

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Bootstrap

Bootstrapping is funding a company through the owner’s personal savings. Bootstrapping allows the business owner to work with what they have without outside interference. Owners who choose to bootstrap have more freedom in operating their business than those who rely on others for their funds.

David Coury is a Florida-based business leader and financial consultant. Visit this LinkedIn page to learn more about his professional profile..

David Anthony Coury, Chariman/Founder

David Coury is the principal behind DAC Consulting which provides advisory services for business development, due diligence and implementation of new business projects as well as developing and executing a wide range of defined business solutions in order to achieve maximum results. David has over 25 years of experience in all aspects of financial and business management in several industry sectors and is an owner and founder of multiple companies. As Chairman and founder of ZARR; David provides the experience and leadership needed to co-ordinate and control the strategic direction, business startup and growth management of the business.