By Evan Vitale
In our six-part series on different types of capital, we offered some basic information as to the different types of capital and investors available for your business.
Here’s a quick review:
- Debt Capital – This is capital that a business raises by taking out a loan. The loan is normally repaid at a future date, normally with interest.
- Equity Capital – Typically you do not need to pay anything back to the investor. Instead, you are selling complete or partial ownership interest in your business in exchange for the capital.
- Private Equity – Similar to a bank loan, private equity funds come from private individuals – or a group of individuals – who make investments or loans.
- Venture Capital – These funds are usually for startups or growing businesses and come from venture capital firms specializing in building high-risk portfolios.
- Angel Investors – An “angel” investor is someone who is typically a family member or a friend who is really investing in the individual. They want your business to be successful, but they are not looking to gain huge profits from their investment.
- Investors – Investors are those who seek to grow their investment and earn an ownership stake in your company with their investment.
