When considering raising first equity finance for a business, it is essential to decide whether the company is a lifestyle or a growth business. This distinction will dictate the type of finance to be raised, with the two primary options being equity and debt. According to Oliver Woolley, CEO and co-founder of Envestors, determining the type of business is the first step in the process.
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The objectives set for the business will influence the choice between equity, which involves selling shares in the company, and debt, which entails borrowing from a bank or financial institution. If the goal is not to grow and sell the business, then raising equity finance may not be the best choice.
