If you need to raise vast sums of capital for your business, creating and selling extra shares in your company is an option.

Inviting outside bodies to invest in the company will also be giving them a say in how you run your business.

Investment/share agreements will have to be established detailing shareholders rights and the amount of dividend to be paid at the end of the year (provided the company does well!)

If your company does very well the next stage would be to float it on the Alternative Investment Market of Stock Market.

The market for groups or individuals willing to invest in a business they are not familiar with, without the security of being paid a dividend or getting their money back is, unsurprisingly small.

The share issue is likely to be redeemable preference shares or preference shares. It gives the shareholders preferential treatment when it comes to paying out dividends and gives them the right to sell their share issue back to the company.

Common equity investors are a form of venture capitalist known as Business Angels who have expertise in a range of business sectors and functions.

They would likely to be attracted to your firm if they had an extensive knowledge of your particular industry, the advantage being they will be contributing their knowledge – as well as the finance.