3. What are the advantages and disadvantages of using equity capital?
The main advantage of equity financing for small businesses is that there is no obligation to repay the money. Equity financing is also more likely to be available to concept and early stage businesses. Equity investors primarily seek growth opportunities, so they are often willing to take a chance on a good idea. Another advantage of equity financing is that investors often prove to be good sources of advice and contacts for small business owners.
The main disadvantage of equity financing is that the founders must give up some control of the business.…
