Final answer:
To start a business, some equity capital is usually needed, often coming from personal savings or angel investors who provide funds in exchange for ownership stakes in early-stage firms.
Step-by-step explanation:
Generally, starting a business requires some equity capital to begin. This is more prevalent in the case of early-stage financial capital, where firms have an idea or prototype but no customer base and consequently, no profits. Without demonstrated profitability, these firms face difficulties in obtaining financial backing since they cannot yet provide a return on investment. For this reason, many entrepreneurs rely on personal savings or angel investors to support their startups. An entrepreneur might use their own funds, or possibly borrow against personal assets such as their home. Additionally, angel investors provide a key source of capital by investing their own money in exchange for a stake in the company during its early development stages.