A start-up that will become a successful company will have several cycles of equity financing during its development. Since a start-up typically attracts different types of investors at different stages of its development, it can use different equity instruments for its financing needs. Financial accounting defines a company`s equity as the net balance of its assets, which is reduced by its liabilities. The basic accounting equation requires that the sum of liabilities and equity be equal to the sum of all assets at the end of each accounting period. Finally, to meet this requirement, all events that have an uneven impact on total assets and overall liabilities must be reported as changes in equity. Companies aggregate their equity on a balance sheet (or asset balance sheet) showing the balance sheet, balance sheet total, specific equity balances, total liabilities and equity (or deficit). A company`s equity balance does not determine the price at which investors can sell their shares. Other relevant factors are the outlook and risks of its business, its access to the necessary credits and the difficulty of finding a buyer. According to the intrinsic value theory, it is profitable to buy shares in a company if it is less than the present value of its share of its equity and future profits to be paid to shareholders. Supporters of this method include Benjamin Graham, Philip Fisher and Warren Buffett. A shareholding will never have a negative market value (i.e.
become a liability), even if the company has a capital shortfall, because the deficit is not the responsibility of the owners. An entity has a more complex debt structure than a single asset. While some liabilities may be guaranteed by certain assets of the company, others may be guaranteed by the assets of the entire company. When the business goes bankrupt, it may be necessary to raise money by selling assets. But the company`s equity, such as the equity of an asset, approximately measures the amount of assets owned by the owners of the business. Most companies that issue equity kickers are start-ups and start-up companies that are not yet accumulating enough assets. They offer a table football to attract investors who would not otherwise be interested in business loans.