There are various types of equity financing, Princelink Ventures Ltd has a wide range of investors. Here are some of the more common types of financing, and how each of them work. Each entrepreneur has different needs, and so it is up to you to determine what is right for you.
Equity participation is the ownership of shares in a company or property. Equity participation may involve the purchase of shares through options or by allowing partial ownership in exchange for financing. The greater the equity Participation rate, the higher the percentage of shares owned by stakeholders. Allowing stakeholders to own shares ties the stakeholders' success with that of the company or property. In this case, a more profitable company will provide stakeholders with greater gains.
This type of investment usually follows as the next step. It involves significantly more money and virtually always requires the investors to be involved in part of the overall running of the company and its decision making process. The average range for this step is often in the 6 figure range, and is invested as a type of Private Equity. Obviously, the overall aim is that the investors will generate a good return via the growth of the company and ideally the eventual Initial Public Offering (IPO) of the company. Venture Capital Investments are usually made in exchange for a percentage of the company's shares, which will provide a strong return on investment if the company is successful.
Other types of investment funding methods for businesses in their later stages include Hedge Funds and Collective Investments.
NB: Working with a good equity partner is probably the most important decision you can make for your real estate project. This person or group is your business partner. Not only is his capital critical to the success of the property, but a good equity partner may provide additional capital to help your property “weather the storm” if things don’t go as well as expected.