Raising Capital: Selling Stock and Borrowing Money

Once you've incorporated your business, you'll need to raise capital to get started. This can be done by selling stock or borrowing money. As Ackman explains, selling stock means that you're selling ownership in your company. In our lemonade stand example, Ackman sold 500 shares of stock for $1 each. Borrowing money, on the other hand, means that you're taking out a loan that you'll need to pay back with interest. In our example, Ackman borrowed $250 from a friend.