Investors take a shareholding in, or part ownership of the business through equity financing.
The investor may want an opportunity at a future date to sell their stake in the business for a profit.
The Development Bank of Wales is owned by the Welsh Government and can provide equity finance as well as loans, often as part of a broader package.
Business angels are individuals looking to invest in new or young businesses and will provide money in return for a shareholding (equity), to be negotiated.
The degree of involvement in the business can vary from providing only finance, to actively partaking in management or providing a particular area of expertise.
The main Welsh Business angel network is Xenos.
Crowd finance is where large numbers of people invest small amounts in new businesses.
They are connected by privately run crowd finance websites, where businesses make a pitch for finance, stating how much they need for the project to succeed.
Individuals pledge money which is taken up if the investment target is reached.
All financiers become shareholders in the business.
Venture capital companies invest equity in new potentially high growth, high tech, and often high risk businesses.