Final answer:
Investors, also known as shareholders, provide equity to a company by purchasing shares of stock, which are individual portions of the company's stock representing partial ownership.
Step-by-step explanation:
True, investors are indeed individuals or entities that provide equity to the reporting enterprise. They are known as shareholders, as they own shares of stock in a firm. These shares represent individual portions of the company's stock, which collectively amount to partial ownership of the company. When a company needs to raise financial capital, it has several options, such as utilizing personal savings, obtaining venture capital, or going through more traditional routes like issuing Treasury bonds or procuring bank loans. Venture capital is a route where investors provide significant amounts of funding to early-stage, high-potential companies in exchange for equity, and as a result, often possess a substantial amount of control and information regarding the company.