Debt vs. Equity
Different Types of Securities Offerings
Throughout the world, there are two common types of securities offerings that companies offer investors: Equity and Debt Securities.
What is an Equity Offering? An Equity offering is most commonly conducted when a company decides to sell stock in the corporation (or membership interest for an LLC, LP, etc.). In return for the investment capital, the investor receives a form of ownership, commonly referred to as ‘equity’. Additionally, stock holders and equity owners may receive some type of dividend payment, and in many cases may even be allowed to vote on matters relating to the company. One of the most common ways for start-ups to raise capital is via an equity offering, as it appear that a large portion of the venture capital and angel world prefer to own part of a company, as opposed to owner debt.
ISIN.net can help structure your equity offering and obtain an ISIN number for your stocks.
What is a debt offering? A debt offering of securities is basically the exact opposite, or the flip side of an equity offering. In an offering of debt securities, the investor receives a ‘promise’ or a commitment from the issuer to pay some type of interest payment – perhaps yearly, bi-yearly, or as agreed to – and at a later date, pay back the principal investment to the investor. Debt securities can consists of any varying instruments, such as bonds, which is the most common, or notes, debentures and others. When the issuer begins selling the debt securities, the investor would know what the bonds or notes interest rate would be, when the maturity date is, and when interests payments will be allocated.
ISIN.net can help structure your private debt offering for bonds, notes, and much more, and obtain an ISIN number for your debt securities.