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You have your own business or you are starting one, and you need to add capital to it. You weigh your options, but you don’t have the funds you need. Add to that, your business plan is a risky one. You approach a bank but you find that most of them do not fund what they think is a risky proposition. You could find an investor, but you might find him backing out because he is not sure if this is the opportunity that will earn high return on investments. Why, you might even have a unique product or service, but you will soon understand that contrary to belief, reaching out to your niche takes a lot of effort and money. And raising funds is like they say – easier said than done. If only you were able to raise capital – everything else would automatically fall into place and doing business will be like a piece of cake. But then again, what do you do, how do you get closer to your dreams, how do you raise capital? You think of raising capital via equity.

Raising capital via equity requires a great amount of thinking. So make sure you spend enough time thinking things through. You need to make sure the many rules associated with raising capital via equity are adhered to. If this is something you aren’t too sure of yourself, ensure you seek advice from a qualified professional – someone who knows business, corporate laws, someone who is up-to-date with the recent changes, someone who understands the nitty-gritties of raising capital via equity. Let’s face it, it takes a lot to lure investors to capitalise your business. Raising capital via equity can be a success if you think things through and you have the foresight of turning things to your advantage.

raise capital via equity


Option one of raising capital via equity is using your own savings or your credit cards. When you have money of your own, why look at external sources for raising capital via equity? But before you opt for this, make sure you have a good talk with subject matter experts, look into the long-term consequences, and decide which form of equity fund is the best way for raising capital via equity. You could have savings, mutual funds, life insurance or credit cards (the last being the most risky funding option), so when you use the funds for your business venture you will need to understand which of the options have scope of bringing in better returns on investment while raising capital via equity.

When your own funding is not an option, there is another great way of raising capital via equity – friends and relatives. Though it may seem shameful to ask them for capital, it seems to be quite a popular option because according to a survey it is the option of choice for 30% of entrepreneurs who are raising capital via equity.
If you decide to go this way for raising capital through equity fund, you must have your attorney draw up a business contract because though you approach people you know for funds in an informal, non-business way, business is best done transparent, telling them how their investment will profit and ensuring that you will keep up your part of the agreement is the most professional way to do business.


The next option to raise capital via equity are venture capitals who provide funds to your company if your business can prove that it has a solid track record and a potential return on investment. Make sure you find a venture capital firm that has similar goals and ideals as yours. Ensure that you have a risk management plan, the foresight to predict where you see your company down the line, and do consider all possible contingencies.
Remember, while raising capital via equity, venture capitalists do not in start up companies and they invest in people, not just companies.

A good place to look for while raising capital via equity is your office – your own employees. If you have a committed workforce that really believes in the organisational goals, then you might even find an employee who would help you raising capital via equity and become a potential investor. If your potential or current employee is likely to become your investor, you get a really committed workforce that is driven by reasons other than the salary.


Before going public with your company, you should consider all the possible risks while raising capital via equity. Capital equity is more risky than any other type of funding. There are tons of legal points that surround this project, especially if it’s for budding business enterprises. Public equity involves a great amount of stress in terms of running the company and a considerable loss of control. The advice of a knowledgeable attorney is absolutely essential. It’s good to take a consultation before deciding on this option of raising capital via equity, or discussing it while choosing the option of raising capital via equity.


After you decide on raising capital via equity, ensure you do all you can to make potential investors perceive your business to be a lucrative option – you must sound clear about your business goals, your business should evoke a sense of high ROI, and investors should want to be a part of the success story. Thereby helping you in raising capital via equity.

Always talk to a qualified business attorney who may not always be your family lawyer. The attorney needs to be abreast with laws pertaining to raising capital via equity, the recent changes, and make sure business contracts are written to protect you and your business, especially the fine print.

While raising capital via equity, you should always plan ahead, do your homework, keep the numbers at your fingertips, take advice from those who know what they are talking, and look for ways to increase the probability of raising capital via equity.