A business is most commonly financed through two methods:
1. Equity Financing
Equity financing refers to when ownership of a company (in the form of stock/shares of a corporation or units of a limited partnership or trust) is issued to investors in exchange for capital. There can be various classes of shares issued that each have varying rights and privileges. Investors obtain a return through the receipt of dividends or through an increase in the value of the shares or units.
Equity financing options include: venture capital firms, merchant banks, private placements and public financing.read more