We have helped several of our clients raise money for working capital or capital expenditures by selling debt instruments to individuals or institutions. In return for borrowing the money, the individuals or institutions become debtors and are supposed to promise that the principal and interest on the debt will be repaid.
Equity financing is the process of raising capital through the sale of shares or a defined stake in an enterprise. Equity financing essentially refers to the sale of an ownership interest to raise funds for business purposes. A startup that grows into a successful company will have several rounds of equity financing as it evolves.
Savage & Palmer acts as a link between Startups and Investors at various stages and uses different equity instruments for the startup's financing needs. For example, angel investors and venture capitalists – who are generally the first investors in a startup – are inclined to favor convertible preferred shares rather than common equity in exchange for funding new companies, since the former have greater upside potential and some downside protection. Once the company has grown large enough to consider going public, it may consider selling common equity to institutional and retail investors.