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Entrepreneurship & Startups vocabulary · Equity & Valuation

Equity

Meaning in entrepreneurship & startups, with examples

/ˈekwəti/nounCore term

In entrepreneurship & startups, equity means: Ownership in a company, divided into shares. In startups, equity is what founders, employees and investors hold, and its value grows if the company succeeds.

In Turkish: hisse, ortaklık payı, öz sermaye

How it is used

A very common word in fundraising and hiring. You give up, offer, receive or split equity. Equity financing means raising money by selling shares rather than borrowing. Early employees often accept a lower salary plus equity.

Example sentences

  1. We gave up 20 percent of our equity in the seed round.

  2. The offer was a modest salary plus equity, which is normal for a company at this stage.

Common collocations

  • give up equity
  • equity stake
  • equity financing
  • salary plus equity
  • split the equity
  • stakeThe share of a company that a person or investor owns, usually given as a percentage, for example a 10 percent stake.
  • cap tableShort for capitalisation table: a list or spreadsheet that shows who owns what share of a company, including founders, investors, employees and options.
  • dilutionThe fall in an existing owner's percentage of a company when new shares are issued, for example to new investors or for an employee option pool.
  • stock optionThe right to buy a number of company shares later at a fixed price, often given to startup employees so they can share in the company's success.
  • sweat equityOwnership in a company that someone earns through work and time rather than money, typical of founders and early team members who are paid little or nothing.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Equity & Valuation

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