Which of the following is a method of equity financing?

Study for the FBLA Intro to Business Concepts Test. Boost your knowledge with flashcards and multiple choice questions, each question provides hints and explanations. Ace your exam preparation!

Equity financing involves raising capital through the sale of shares in a business, which means giving investors a stake in the company. Venture capitalists are a prime example of this method. They invest in early-stage companies, providing funding in exchange for equity in the business. This relationship not only helps with financial backing but often comes with additional resources and expertise from the venture capitalist, which can be critical for growth.

The other options represent different forms of funding that do not involve equity. Bank loans refer to debt financing, where a business borrows money that must be repaid with interest. Crowdfunding can sometimes involve equity, but it often includes donations or rewards in exchange for support without giving away ownership. Grants are typically funds provided by governments or organizations without the expectation of repayment, and they do not involve giving away any ownership stake in the company.

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