Equity Funding

Equity funding is investment where investors provide capital in exchange for ownership stake (equity shares) in your company. Unlike loans, there's no fixed repayment or interest. Returns come from company growth and eventual exit.

Typically, early-stage startups give 10-25% in seed/angel rounds, 15-30% in Series A, and 15-25% in later rounds. The exact percentage depends on valuation, amount raised, and negotiation. Aim to retain 60%+ founder equity through multiple rounds.

Investors evaluate: strong founding team, large market opportunity, unique value proposition, traction/revenue growth, scalable business model, competitive advantages, financial projections, and clear exit strategy. Sector expertise and passion also matter.

The funding process typically takes 2-6 months from initial pitch to money in bank. This includes investor meetings, due diligence, term sheet negotiation, legal documentation, and fund transfer. Early preparation speeds up the process.

Common investor rights include: board representation, information rights, approval rights for major decisions, anti-dilution protection, liquidation preference, and tag-along rights. Rights vary based on investment stage and amount.