what is equity financing 
equity financing is the process of raising capital through the sale of shares companies raise money because they might have a short term need to pay bills or need funds for a long term project that promotes growth by selling shares a business effectively sells ownership of its company in return for cash equity financing comes from a variety of sources for example an entrepreneur s friends and family professional investors or an initial public offering ipo may provide needed capital an ipo is a process that private companies undergo to offer shares of their business to the public in a new stock issuance public share issuance allows a company to raise capital from public investors industry giants such as google and meta formerly facebook raised billions in capital through ipos 12while the term equity financing refers to the financing of public companies listed on an exchange the term also applies to private company financing 