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  • Difference Between Sweat Equity and Equity

    Sweat Equity vs Equity

    Sweat Equity and Equity are the terms used in Finance. They are types of Equity’s in Finance. Even though both come under same asset class, They do have Differences between them. Know the Differences Between Sweat Equity and Equity

    Sweat Equity

    1. Sweat Equity is a term used to describe contribution of time and effort made to a project by a group of people.
    2. Sweat Equity happens mostly in case of startup companies.
    3. Sweat Equity holders are like Money lenders.
    4. Sweat Equity is used in startup companies by giving shares or stock options to the employees in return of work.
    5. This term is also used to describe the efforts put into a startup company.
    6. It is also known as stock for services or equity compensation or sweat equity.

    Difference Between Sweat Equity and Equity

    Equity

    1. Equity is a term used to describe the contribution of money to a fund or share.
    2. Equity happens mostly in case of well established companies.
    3. Equity is used to raise funds for bigger projects by the companies.
    4. This term is used mostly in Finance where Companies issues shares / equities and investors buys them.
    5. It is also known as stocks or shares or equity.

    Posted under: Finance
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