What is Equity?
Ownership in a company, usually expressed as shares or a percentage.
Equity is ownership. If you own 100% equity, the whole business is yours. When you raise money or give shares to a co-founder or employee, you give away slices of that pie in exchange for capital or work.
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 can lose control of your own company.
Equity is the most valuable currency a startup has. Spend it deliberately.
Related terms
Definitions from the Business Dog Glossary — educational, occasionally satirical, never financial advice.