The demand for equity finance can be traced back to the importance of the same in the context of a business. It has been seen that any company, irrespective of its size, could have a certain amount of demand for equity finance for any number of business purposes.
More on Demand for Equity Finance
The demand for equity finance is faced by all companies at various stages of their businesses – it can be at the start, at the time of expansion or at the time of acquiring a new business.
The demand for equity finance could be of any company regardless of its size.
Investors and Demand for Equity Finance
The investors have an important role to play as far as the demand for equity finance is concerned. It is their job to satisfy the demand for equity finance.
Over the years the investors have acted as sources of equity finance for the companies that have needed equity finance.
Meeting Demand for Equity Finance
There are several ways in which the companies, that need equity finance, satisfy such demands. The variation depends on the particular type of company that is facing the need.
In case of the small and medium term companies they take loans from family members, acquaintances, or other sources like angel investors and venture capitalists.
In case of the larger business enterprises there are several ways in which they might be raising equity finance. It might be through issuance of shares or debentures in the financial markets or taking financial assistance from the venture capital firms.
Situation of Demand for Equity Finance
It has been seen that there is a lot of demand for equity finance but not all demands are being satisfied. For example, in case of the small and medium sized businesses it is being seen that the demand has exceeded the supply of equity finance.