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Sweat Equity 101

Sweat equity is the non-monetary investment that owners or employees contribute to a business venture. Startups and entrepreneurs often use this form of capital to fund their businesses, by compensating their employees with stock rather than cash — which also helps to align risk and rewards. In real estate, it refers to value-enhancing improvements made by homeowners to their properties.

Sweat equity — which is a form of non-cash capital — is also known as equity compensation, and can take the form of stock options, restricted stock units (RSUs) and performance shares.

Read more: Sweat Equity https://www.investopedia.com/terms/s/sweatequity.asp#ixzz5SgrwepG9
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Read more: Sweat Equity https://www.investopedia.com/terms/s/sweatequity.asp#ixzz5SgrReSxm
Follow us: Investopedia on Facebook

 

Sweat equity is the most valuable equity there is. -Mark Cuban

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