> Imagine for a second that any time you borrowed money to buy something, like a home or a car, you paid that back not by actually paying the loan plus interest, but by a % garnishment of your lifetime wages. That is what equity capital is like.
Weird analogy. It's more like "what if you borrowed money to buy something, didn't have to return it, but if you made money with that thing, you give the lender a cut, forever".
Because the point is: it's not a loan, you don't have to pay it back, and you're not on the hook for it if things go wrong. That's the big upside and why lots of people do that instead of getting a loan. Because loans are available, but people don't want that risk and are willing to give up some of their ownership to avoid it.
Weird analogy. It's more like "what if you borrowed money to buy something, didn't have to return it, but if you made money with that thing, you give the lender a cut, forever".
Because the point is: it's not a loan, you don't have to pay it back, and you're not on the hook for it if things go wrong. That's the big upside and why lots of people do that instead of getting a loan. Because loans are available, but people don't want that risk and are willing to give up some of their ownership to avoid it.