Financial stability is an essential aspect of anyone’s life. To ensure we combat the uncertainty of the economic crisis, one must have a diversified investment strategy. While there are many investment options available in the financial market, understanding and choosing the right investment is not an easy job. 

It is however possible to simplify this journey by seeking guidance from a qualified professional. In India, a SEBI registered investment advisor can issue fiduciary advice to you. Thanks to SEBI’s efforts, today the financial market is investor friendly and one can look for professional assistance as against opting for ‘known source of guidance’.

If you’re a beginner and looking to understand the corporate terms of investment, this article is just the perfect read. Let’s understand five important financial terms that you as an investor must know before investing. 

1. Equity

Equity in investing refers to ownership of company shares in the form of stocks which can be bought, sold, or traded in any financial market. Equity is also called shareholders’ equity or owner’s equity. In a company, the difference between the asset and liabilities shows how much equity the company has. 

2. Seed Capital Funding

Seed Capital refers to the initial investment provided to a startup or early-stage company to kickstart its business operation. The capital generally comes from angel investors and venture capital. Seed Funding is equity-based primarily financing. The investors agree to exchange their capital with the company’s shares. 

3. Restricted Stock Unit (RSU)

Restricted Stock Units (RSUs) are a type of compensation an employer can grant to its employees in the form of company shares as an incentive or reward. RSUs promises to grant shares of company stock to the employee at a future date. RSUs are commonly used by companies in executive compensation and employee retention programs. RSUs are less risky. 

4. Series Funding

Series funding is a kind of external funding used mainly by startups to fund their business operations. The series of funds is divided into periods and the company’s growth stories. Series is like series A, B, C and D. Each round of series fund has different terms and conditions. Series funding is received from external investors, typically venture capital firms, in exchange for ownership equity. 

5. Corporate Bonds

Corporate bonds are debt securities companies issue to raise capital for various Business purposes. Public and private organisations generally issue corporate bonds. They offer fixed and floating interest rates that credit rating agencies typically rate. These bonds are relatively safe investment options as it carries less risk. Corporate bonds do not guarantee ownership interest, unlike company stocks. 

When it comes to investment options, it’s essential to carefully consider your financial goals, risk tolerance, and period. Diversification and professional advice can help mitigate risks and maximize potential returns. Expert investment decisions can pave the way to long-term financial stability, be it bonds, stocks, real estate, or other alternatives.