Partner Equity Investment

Definition

Benefits

By having a partner invest and buy equity in your company, the responsibility of the business’ success is now a shared and joint effort. It is often a concern that bringing in a partner means losing control over the business, especially if your partner provides enough capital to outweigh your share of the company. In some effort to relieve this concern, many companies attempt “sweat equity” trials before fully signing on a partner. With sweat equity, a person will work for your company providing their time and labor, not their money. In return, they receive small portions of equity to the company. By using this method, you can add value to your company with the projects completed as well as test the loyalty and dedication of your potential partner.