What is Equity?
Ownership in a company — the share you actually hold, and what would be left if everything were sold and every debt paid.
Equity is ownership. In accounting terms it's assets minus liabilities: what would remain for the owners if you sold everything and settled every debt. In conversation it usually means the percentage of a company someone holds. If you own 100% equity, the whole business is yours; raise money or give shares to a co-founder, and you hand over slices of that pie for capital or work.
It's the most valuable currency a startup has and the easiest to spend, because handing over 10% costs nothing today and everything later if the business works. The founder's eternal tension: a smaller slice of a huge pie can be worth far more than 100% of a tiny one — but give away too much too early and you lose control of your own company.
Two things people learn late: equity is worth nothing until there's a way to sell it, and a small slice of something real beats a large slice of an idea. Most cap tables are a record of what the founder believed at the moment they were desperate. Spend it deliberately.
Related terms
Definitions from the Business Dog Glossary — educational, occasionally satirical, never financial advice.