Definition
Equity is the ownership interest in a company, represented by shares of stock. It shows up in the paperwork: ownership, rights, and what happens when things change. Name it clearly, then let the next decision — a hire, a price, a test, or a pass — follow from that meaning.
In the room
How the word shows up in a real conversation.
Two cofounders disagree until they define Equity. Once they agree it means “Ownership interest in a company, represented by shares of stock”, the argument becomes a decision.
Common mistake
Using Equity as a label instead of a fact. If you cannot point to the evidence — a number, a customer, or a written assumption — you are using the word as jargon.
See also
Equity capital
Funds raised by selling ownership shares in a company.
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Equity financing
Raising capital by selling ownership shares rather than borrowing money.
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Equity investment
Investment in ownership shares of a company with potential for capital gains.
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Equity multiplier
Financial ratio showing how much of a company's assets are financed by equity.
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