Equity funding is the most common form of funding for a new business and represents an ownership stake in the business. This section contains posts that describe how founders can secure investment capital to help fund their business.
An often misunderstood concept relates to how to allocate initial equity in a startup. Doling out equity in your business is a pivotal and often difficult task for many founders, but it does not have to be.
Most Businesses Require Some Form of Funding to Get Started. However, Based on What Business Stage the Business Is At, The Sources of Funding Will Be Different. This Is Where Your Funding Plan Comes in To Identify How the Business Will Secure Financing for Each Stage.
Many Entrepreneurs Seek Dumb Money to Fund Their Startups. Dumb Money Places A Drag on The Business with Debt or Dilution of Ownership. Smart Money Provides More Than Money to A Business in Terms of Leverage from Additional Skills, Experience, And Contacts Which Increases the Value of a Business.
A partner in a limited partnership that is a decision-maker (general partner) is considered an employee of the business by the IRS and is treated differently than limited partners. Income for general partners is considered earned income and is subject to additional taxes but also to additional potential tax deductions. Moreover, as a general partner, you are exposed to additional liabilities.