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What is equity?

1790 ratings | 460199 views
Video explanation as to how equity is created in a small business and start up up. What is equity, is a video ebook chapter from igoIQ.com and is perfect for any entrepreneur wanting an explanation of equity in business
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Text Comments (123)
Hector Calzadillas (4 days ago)
Thank you for the in depth walkthrough. I know nothing about the subject so it's great that you do this. You make it easier for full time workers to learn when there isn't time to read much.
owenia88 (1 month ago)
This was painful
mary Andrew (1 month ago)
Nonsense either write or explain... its irritating the way you drag while speaking
chinmay rawool (3 months ago)
Tooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo slow
Don’t Trip (3 months ago)
If you can't explain it simply, you don't understand it well enough.
Cris Yorke (4 months ago)
Is this a FUCKING drawing lesson?!
thomas oliver (4 months ago)
skip to 4:30
thomas oliver (4 months ago)
dude stop complicating it and just explain it
Renoy George Varghese (7 months ago)
Man!! You need to speed up 😂
game girl (7 months ago)
Economic for dummies Paul bob and Peter buy a plot of land say 1000.000 square feet. Paul owns 20% he decided to grow carrots eat all he can and sell the rest . Bob owns 30% he decided to grow wheat and sells it to a bread factory Peter owns the rest aka 50% Now peter is very smart he doesn't do anything with the land , he goes to the local Bank and lends money from the bank to buy out his brothers. He now owns all the land he let his brothers stay and lets them pay him rent on the 50% he previously owned he puts a windmill park , and sells the electricity to the town, he also sells his electricity to his brothers and the bank is paid back in 10 years. Now Peter destroy the windmills and sells it to the local scrap yard he sells his land to a fictional company in Ireland he created, the so called company raise the rent for the brothers Bob and paul can't pay there rent so the company ends the renting agreement. Both brothers most pay a one time fine, to the company. Now peter owns all of the land he puts a mansion on it officially he doesn't own it the company does peter rents his house to himself (true his company) he actually doesn't pay on cent of rent . The company now lends money at a bank in the US ( the mansion is put up as mortgage) after all it is rented at 6% to peter who pays olny on paper . Peter s company buys with that money a other mansion and rent it out to a real rental at 6% now the company value has raised by 50% he goes to his brothers and conceived them to invest in the company he promised them a 5% return to their investment he buys a other mansion and rents it out to the company that lends more money and or peter is now a multi millionaire his brothers are getting there 5 % and are now paying more taxes than Peter ( after all Peter is just a employees of the company that he owns and paid for his social security 😎) this was based on a true story......
Shalini Muniraju (8 months ago)
Sunil Dahiya (9 months ago)
too slow
Jeff Harbaugh (10 months ago)
Those that want equity, don't want world equity. To do so drastically reduces the standard of living of everyone in first world countries.
******* (1 year ago)
POONAM GAWANDE (1 year ago)
chutiye... worst... time wasting
Yogesh Goel (1 year ago)
Man, your tutorial is good but it's very very slow.....
kelvin peter (1 year ago)
you talk too slow like you on sedatives and repeating over and over. total wastage of my valuable time.
Fathima Rasheed (1 year ago)
is equity and capital the same thing??
Honey Grace Tabuzo (10 months ago)
Fathima Rasheed I thought so too
Pankaj Kumar (1 year ago)
I think this is the best way to explain and that strike to my mind right away. Thanks @foundermachine for this great Work.
Guy Bacos (1 year ago)
Well explained, thanks!
bsklasika (1 year ago)
so where did bank manager's interest go?
Augustus857 (1 year ago)
Watch at 1.5x speed and enjoy
Murlikrishna Chippa (1 year ago)
Very good video
J P (1 year ago)
Fuck you dude. It took you four and a half minutes to Define what Equity is. I hate you English fuckers who don't know how to talk! Now that I got the one little tidbit of information from you I needed to know I'm out don't worry I won't be subscribing to this shit
So equity is net worth/income?
rising surfer (1 year ago)
So basically, equity is what you have put in to the business that is not a loan?
khan cricket academy (1 year ago)
your teaching is wast of time you take long time to understant students thats why do not share any more any videos
Umer Ayub (1 year ago)
Wouldn't the liability=principle amount ($750k) + Interest that is owed to the bank?
FRAG128JJ (1 year ago)
Umer Ayub yes. The creator missed this point.
Ashkan Ahmadi (1 year ago)
Thanks for the easy-to-follow video. Where does profit fit here? let's say you can a profit of 50k. Do you add that to the assets or is it on its own? What if you make a loss? Is that liability now? thanks
Gen Mystical (10 months ago)
Cry Ozy same question I have ..
Cry Ozy (1 year ago)
Alice Garcia Wait so both the income statement and balance sheet are independent of one another ? But is it right to say that given the profit i earn , it can be uses to pay back the loans im getting from the bank thus decreasing liabilities and increasing equity ?
Alice Garcia (1 year ago)
That is a great question! If you subtract income minus expenses, and the value is positive, you have profit. This will be captured on your income statement (also known as P&L, earnings statement, revenue statement, operating statement, statement of operations, and statement of financial performance). If your value is negative, you have a loss, and it will be reported on the income statement. The balance sheet only captures assets, liabilities, and equity. Whereas the income statement only captures income and expenses. Hope this helps!
Nikolai Mhishi (1 year ago)
Why you no talk faster? [sic]
mohammed jawaad ali (1 year ago)
this was a great video. could you please make videos on preference share and debentures using the same example?
Mohammed Ali (1 year ago)
so how many drinks did you get? divide that by an interest rate of 4% over 6 years with an additional annual fee of 50 $ I STILL DIDN'T UNDERSTAND WHAT EQUITY MEANS!!!!
kushal Bhetuwal (1 year ago)
fucking explnation
nrgnz34 (2 years ago)
shouldnt have taken 4 and a half minutes to introduce the definition of equity in a 7 minute video about equity...
C. Lincoln (2 years ago)
You are a very good teacher. Very straight forward explanation and it didn't take 1 hour 20 min. Thanks for the upload.
hamzjeorge (2 years ago)
if you are a fast listener U can actually watch it in 1.5 speed
Onlashuk SHUGAHARRA (1 year ago)
I did. All one has to do is focus their attention, and it can easily be listened too at 1.5x speed. Of course, many people suffer from a degradation in focus and concentration because they allow themselves to be easily distracted. Tis only an undisciplined mind that allows for the distractions to overwhelm them. The solution is to set one's mind on the goal and practice, practice, practice.
Arvin Peopleinlove (2 years ago)
Don't forget the interest though.
David RP (2 years ago)
To slow!!!!
LOADING... (2 years ago)
watched speed at 2. faster.
ashwini tayade (2 years ago)
Very nice video Just ends abruptly
Tavaris Brown (2 years ago)
why 2 million shares where did the number cum from
Tavaris Brown (2 years ago)
125- 125 (2 years ago)
Tavaris Brown cum 😩🍆💦
Jacob Ash (2 years ago)
surely the liability is 825k because you have to pay the 10% interest???
Hflack012 (2 months ago)
Jacob Ash I was wondering so or even more depending on the future value after given number of years to repay the loan
nikhil b (2 years ago)
how would eachh get 200k. i mean its shares by others?plz reply.
tanchung namsa (2 years ago)
Lol...go faster
eddie c (2 years ago)
are you eating shit while talking? Why talk so slow
Great presentation!!
Kimberly Common (2 years ago)
its OK to take your time cause some may not know
mon site facile (4 months ago)
Kimberly Common exactly
Jose Cruz (2 years ago)
Simple, to the point and effective (which explains the sorta 'napkin' background). Thanks.
rafaelj80 (2 years ago)
FUUUUUUUCK!!!!!!! Talk faster maaaaan!!!!!!!!!!!
Sangeet Gupta (2 years ago)
it can be described in just 2 min
Fintan111 (3 years ago)
Watch at 1.25 speed.
tan tran (15 days ago)
yakuni tachimasen (3 months ago)
Legend Ishaq (4 months ago)
you're a life saver
Ched Custodio (4 months ago)
Damn right man!
thomas oliver (4 months ago)
i cant believe i can understand him better at 1.5
EzzAldeen (3 years ago)
if you don't like the speed so use the speed 1.25 times
PunnerGamerNerd (3 months ago)
For a real challenge watch at 0.25 speed
Onlashuk SHUGAHARRA (1 year ago)
I used 1.5x.
lauren collins (3 years ago)
so equity is net worth?
Mohammed Rafi (3 years ago)
jiaqi xu (3 years ago)
KillPixel Games (3 years ago)
alt + friend four
sunny kumar (2 years ago)
KillPixel mes
Rathish Ramachandran (3 years ago)
This could have been done in 3mins!
Legend Ishaq (4 months ago)
Souvik Majumdar (3 years ago)
go get some sleep and then talk
Slater Victoroff (3 years ago)
This is easily the worst video I've ever seen. Doesn't explain equity, only confuses people and doesn't add anything.
Reason (3 years ago)
what's difference between equity and net worth?
VenkatCharan Saginam (3 years ago)
quaqmireful (3 years ago)
What are the elements that are brought from Income statement onto the balance Sheet ?
Liam David Farthing (3 years ago)
equity is what you own after all expenses are paid for?
vijaya lakshmi (4 years ago)
thank u
Sean Loucaz Talactac (2 years ago)
vijaya lakshmi
Pricilla Banda (4 years ago)
Equity is the treatment of equal to the equals and the treatment of the unequal to the unequals. It's a matter of fairness and justice.
New-clear (4 years ago)
Equity=What you own.  Liabilities=What you owe.
Kurt Patterson (9 months ago)
equity in an Accounting sense vs equity in a Kyosaki sense.
Amanda Beltran (10 months ago)
New-clear thank you
obalajadia (1 year ago)
haha yeah, that simple. no blah blah that confuse people.
vladfahmusic (4 years ago)
thank you ! 
Life's Student (4 years ago)
lol the see-saw analogy is misleading Equity is good the more you have the better...Equity is the difference between the liabilities and assets. Your goal is to pay off the loan, the more you pay off the higher your equity will be. Forget assets for a sec: If the LIABILITY goes UP (due to losing money, unexpected costs, missing a payment on the loan, etc) then your equity goes down or is at a stand still. If the LIABILITY goes DOWN (making profit whilst paying off the loan you took out) the equity will increase. You can analyse your equity over the duration of some time to see how well or how badly your finance is doing. I hope this doesn't confuse people.
Mari Vern (5 months ago)
it is way more understandable than what is saw so far,thanks
carmine (5 years ago)
what i need to understand is ok you borrowed 750 k for say 10 percent that means you only have to give back 75 thousand per year?
LORD VIB3 (10 months ago)
+carmine If you have an interest only loan, you pay $75k a year back. Usually, though, you pay the $75k + part of the amount you borrowed. But it depends on how you set up the loan repayment.
Hellenisma (5 years ago)
thx for the explanation :)
Hellenisma (5 years ago)
no one was talking about weight
Tania Chalya (5 years ago)
so less equity mean less money we owe to the bank right? seesaw is wrong
Rainbow Squash (7 months ago)
You're retarded lol
Midster Wu (5 years ago)
Totally misleading newbies.
Victor Amaral Iglesias (6 years ago)
For me, it was a very clear explanation.
georgios tz (6 years ago)
One video to learn how equity is perfect!
Babak Mohajeri (6 years ago)
it is missed one point . bank interest , so if you drop the your final assets from final liabilities you will end up with equity .
Babak Mohajeri (6 years ago)
two much explained , Simply equity is residual when you pay all of your commitments from any kind of capitasl and assets you have .
Arturo Perez (6 years ago)
i didnt quit get it, but thanks for the effort
Shakaama (6 years ago)
not a very good explanation.
MrPooPooJohn (6 years ago)
Using a seesaw is not the best analogy.
藤川雄一 (6 years ago)
this looks like equity = asset...
Othman Ahmed (7 years ago)
Excellent video .....
donky dunky (7 years ago)
funny ur cartoons and thank your for ur video and i will be the next bill gates...

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