Telecom Sector Investment Banking: Fuelling 5G and Beyond
The primary benefit of equity financing is that it provides a source of alternative funding to debt for companies. Small start-ups that may not be qualified to obtain large bank loans can access funding from angel investors, venture capitalists, or crowdfunding platforms to finance their needs. In this case, equity financing is perceived to be less risky compared to debt financing since the company will not have to repay its shareholders. Investors usually look at the long term without expecting a short-term return on their investment. It enables the company to reinvest the cash flow from its operations to grow the business rather than focusing on debt repayment and interest.