What is Equity Capital?

Equity capital or generally know as financing is the money that a business will raise in the exchange of ownership sharing with the company.  The ownership is typically represented with the shares of stocks that is owned.  These stocks are getting converted into the financial instruments with the private companies.  Two of the most important key sources in equity capital with new and even emerging small businesses are the venture capital firm and the angel investors.   So, when you hear the term equity capital in a small business you should be aware that it has something to do with the company’s stocks!