Debt vs. Equity – Which one should startups use?
Any young company looking to raise money must first decide on a type of financing: debt or equity. Debt financing refers to when a business borrows money that they then need to pay back with interest. Equity financing, on the other hand, is when investors inject capital or other assets into a business in exchange for a certain percentage of ownership. Startups should be aware of the advantages and potential downsides of each form of financing.