Entrepreneurs have various options when it comes to securing funds for their businesses, primarily categorized into equity and debt financing. Equity financing involves personal investment from the owner or external investors like venture capitalists, angel investors, and partners.
Debt capital is the financing that a small business owner has borrowed and must repay with interest. It does not require entrepreneurs to give up ownership in their companies.
Equity financing represents the personal investment of the owner (or owners), and it offers the advantage of not having to be repaid with interest.