Learning Outcomes
  After this webinar, you’ll be able to:
  • Summarize the types of capital and forms of 
   financial capital
  • Describe the types of equity capital that 
   businesses use at different life stages
  • Identify resources in B.C. that can help businesses 
   in your community attract equity capital
  • Recognize the barriers that prevent businesses 
   from attracting equity capital
  What is Capital?
  Assets that make it possible to 
  generate economic benefit
               Financial
               NHSBaumotucuriltialanal
  Forms of Financial Capital for 
  Economic Development
  • Equity: money given for shared 
    ownership
  • Debt: money loaned at a cost, to be 
    repaid
  • Grants: money provided for specific 
    outcomes, generally not repayable.
                         Equity Vs Debt
           Advantages of Equity                  Advantages of Debt
           •   Money does not need to be         •   Lender has no claim on future 
               repaid*                               profits or control of the 
           •   No interest payments to use           company
               up limited cash flow              •   Interest on debt can be 
           •   Equity partners may also              claimed on income taxes
               contribute knowledge and          •   No need to comply with 
               connections                           securities regulations
           •   Don’t need to qualify for a       •   Variety of types of debt to 
               loan (credit history, business        meet your specific needs
               banking criteria)
                        Equity Vs Debt
           Disadvantages of Equity            Disadvantages of Debt
           •  Sharing ownership, decision-    •   Interest costs must be paid 
              making, future gains of your        regardless of business results
              company                         •   Tough to qualify for loans 
           •  Slow, complex process to            based on credit history
              access financing                •   Lenders may require more 
           •  Ending the relationship = “it’s     collateral that you have
              complicated”                    •   Non-repayment results in 
           •  Money rarely comes in small         asset seizure and credit 
              amounts                             problems in the future