Equity Funding means raising money by selling a portion of your business with a minimum of 10% to a maximum of 75% of your company shares to investors, such as venture capitalists or angel investors. In return, investors become part-owners and share in future profits. There is no repayment required, but you give up some ownership and control.
Debt Funding (Loans) means borrowing money that must be repaid with interest over time. You keep full ownership of your business, but you have a financial obligation to repay the loan, regardless of whether your business succeeds or struggles.
Key Difference:
Using A/B testing frameworks and NPS (Net Promoter Score) surveys to achieve >40% retention rates before advancing.
Scenario-based DCF (Discounted Cash Flow) models integrated with Monte Carlo simulations for risk assessment.
CAC:LTV ratio >3:1, churn 60% as per top-tier VC benchmarks like Sequoia.
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