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Equity Financing refers to the process of raising capital by selling ownership stakes, or shares, in a company. It is a method of corporate finance that allows businesses to raise funds without taking on debt, thereby avoiding interest payments and maintaining a healthier balance sheet. Equity financing can come from various sources, including venture capital firms, angel investors, and the public through initial public offerings (IPOs). The funds raised through equity financing can be used for a variety of purposes, such as expanding operations, developing new products, or making strategic acquisitions. In exchange for their investment, investors receive shares in the company, which entitle them to a portion of the profits and voting rights.