Cash is a big portion of making any company successful, but not always do the founders have enough cash to fund their business. In this episode of eLagaan Whiteboard Friday, the eLagaan team talks about whether you should get loan (debt) or sell equity to raise funds for your business/startup.
You are going under Debt whenever you take loan that you promise to pay back. You are giving away equity when you sell part interest in the company in return of some funds. The video defines the difference between debt vs equity, discusses various advantage & disadvantage of going one way or the other. When should companies choose debt over equity or vice versa.
Raising the right kind of capital is very important, and can change the future of the company or your stake in it. So consider very carefully which way would be ideal for your scenario.