This is an example of the financing portion of a business model. There are a few ways for a business to obtain the capital needed to open the doors and start their business. Loans or debt is one of the ways that is usually sought when attempting to start a business, this is classified as a liability on the balance sheet. Another way a business can secure money for a business is through equity, this is done through money from the owners pockets, or other partners that want a stake in the ownership of the business. This is shown as stockholder's equity on the balance sheet.
