Key Terms
- Equity Range: Between £50k and £500k.
- Legal Structure: Registered CIC limited by shares or a CLS.
What is an equity investment?
Equity is money that is invested in a company in exchange for shares. The company is valued and the investor is given dividends according to their ownership % in that company and the capital that has been gained or lost as part of that investment.
What will a typical equity investment look like?
The average equity investment will be £200,000 for early stage organisations and £600,000 for later stage ones. UnLtd & BII will take an average stake of 15-25% in a business, but this could be less, or more. All equity will be bespoke to suit the needs of the individual business - there will not be a 'one size fits all' calculation.
What else should I know?
Equity is well suited to businesses who cannot afford regular repayments due to an irregular cash flow. It is less common for early stage businesses in the UK investment market as it is more risky than debt finance as the investor doesn't know when they will get a return.