Equity capital is capital that is given to a company or business in return for part ownership in the company. The investors are compensated from the profits of the company. That is, if the company makes any profits.

This is one of the least risky forms of financing because if your business goes bust you don’t have to pay back the capital. In case of debt capital, you have to pay back the capital borrowed even if you don’t make any profits.

Although, equity capital is the lea...
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