
Companies Equity Release
Selling Equity to Investors is a way for business owners to raise capital by offering shares in their company to external investors. This can provide funding for growth, expansion, or liquidity for the owner while bringing in strategic partners.
Types of Equity Investors:
- Angel Investors – Wealthy individuals who invest in early-stage startups in exchange for equity.
- Venture Capital (VC) Firms – Professional investors who fund high-growth startups, typically in exchange for significant equity and control.
- Private Equity (PE) Firms – Invest in established businesses, often with the goal of improving profitability and eventually selling at a higher valuation.
- Crowdfunding – Raising small amounts from many investors via platforms like Seedrs or Crowdcube.
- Strategic Investors – Larger companies that invest in smaller businesses to create synergies or gain access to new markets.
Key Considerations Before Selling Equity:
- Valuation – Determine how much your company is worth to set a fair price for shares.
- Dilution – Selling shares reduces your ownership and control.
- Investor Expectations – Investors typically seek a return, which may influence business decisions.
- Legal & Financial Structuring – Ensure compliance with regulations and shareholder agreements.