Understanding Owner's Equity

Equity or owner's contribution means the private money you put into your business. If your business fails you will lose that money.
Owner's equity is called risk capital, because you as the owner risk your money on the business. Even though equity is a risk for you, investing your own money in the business makes the business less risky. This is because capital from equity will put less pressure on the business than borrowing money.
Read more: https://www.entrepreneurshipsecret.com/understanding-owners-equity/