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Equity Funding for Startups and MSMEs: A Primer

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-           Alastair Pavrey Many entrepreneurs find themselves in a dilemma when it comes to raising funds and deciding between equity and debt. There are lot of common concerns regarding equity with respect to losing control and giving up equity stake which leads them towards debt funding, ignoring the risks inherent with that strategy. Although sometimes viable and effective, taking on debt at the wrong time can be a death wish to most startups and put them on a path to failure. Most importantly, many MSMEs are not very enthusiastic and aware of the various other financing options available. Private equity funding from a credible investor has many positives for MSMEs such as increasing the Net worth and strengthening the books, guidance to better endure the volatile business environment, flexibility in structuring return of investment, access to high-level intellectual capital, etc. Further, raising private equity is easier as compared to raising money from public issue wit