Stock exchange for beginners

Entrepreneurs, small and medium enterprises (SMEs) and large companies can either raise funds through debt or equity, the latter consisting of the entrepreneur foregoing some ownership of the company and the investor assuming the risk of the business going bankrupt. Unlike a loan, the entrepreneur doesn’t repay the investor with interest. More secure and more heavily regulated, equity financing encourages a savings culture and a more diversified, and therefore less risky, portfolio. It includes funds from personal savings, friends and families, corporate partners, angel investors as well as from venture capitals. Moreover, entrepreneurs view their company as successful if it is able to obtain equity financing by listing on a stock exchange. A centralized system A stock exchange, often identified as an extension of equity crowdfunding, acts as a centralized system boosting communication between all stakeholders interested in equity financing. Through this platform, information on bids, prices and transactions becomes