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Great talent can be expensive. For a cash-strapped startup, offering big salaries and other incentives to attract top talent isn’t always possible. That’s why many companies offer up a slice of the company as part of the compensation package. While this can be a great option in some situations, offering ownership to employees isn’t exactly a risk-free venture. In some cases, it can be a disaster for everyone involved. Continue reading
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Given the seemingly lower risks and potential benefits of equity, you might wonder why it isn’t always the preferred instrument for early-stage funding. There’s one simple reason: Equity is expensive. Every percentage point you give up in an equity deal takes a huge bite out of your profit when it’s time to exit. For some businesses, taking on debt to finance growth might make better long-term sense.
In this episode, host and business coach Tom Ryan talks about the bigger picture of debt and equity as fundraising instruments. As always, Tom is joined by producer and co-host Jason Pyles. Continue reading
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Is equity-based funding really the best option for financing the growth of a startup? For many early-stage companies, trading in a percentage of the ownership for some much-needed cash makes a lot of sense. In other situations, however, the limitations and long-term risks outweigh the rewards. As with so many things in business, finding the “right” answer is really a matter of balancing options and understanding the greater context.
In this episode of the Success In Business Podcast, host and business coach Tom Ryan talks about some of the hidden disadvantages of equity-based finance. As always, Tom is joined by producer and co-host Jason Pyles. Continue reading
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Equity-based finance is the most common instrument used in seed-stage funding. It’s also one of the trickiest kinds of funding, because equity is all about ownership. Selling equity may be a relatively easy way raise some much-needed funds, but it comes at a cost. When someone buys a piece of your company, they also gain a legally enforceable right to have a say in the direction of the business. A great business can suffer, or even fail, due to a bad equity partnership.
In today’s episode, host and business coach Tom Ryan further explores the topic of seed funding, focusing on the major considerations for equity-based fundraising. As always, Tom is joined by co-host and producer Jason Pyles. Continue reading