1 sweat equity | Definition of sweat equity
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sweat equity

noun

Definition of sweat equity

: equity in a property resulting from labor invested in improvements that increase its value also : the labor so invested

Examples of sweat equity in a Sentence

He's built up a lot of sweat equity in his house. He put countless hours of sweat equity into that old house.

Recent Examples on the Web

 District officials emphasized that much more of the wealth, sweat equity and intellect of L.A. should be directed toward public schools. — Los Angeles Times, "Homeless kids, chronic absenteeism, frustrated parents: L.A. Unified is back to school and trying to help," 20 Aug. 2019 To qualify, prospective homeowners must have a need for adequate housing, the ability to pay and a willingness to partner with Habitat and contribute 200 to 400 hours of sweat equity toward building or renovating Habitat homes. — Paulina Pineda, azcentral, "Habitat for Humanity opens 18 townhomes in Tempe, plans up to 20 single-family homes," 17 Aug. 2019 For those willing to add some sweat equity to their day, the trek to Star Dune (the highest sand dune in North America; 750 feet) is a calf-burning must. — Washington Post, "The country’s eight most beautiful campgrounds," 12 July 2019 There has been an awful lot of sweat equity put in by the staff with Derrick Jones Jr., Kendrick Nunn, Duncan Robinson even Bam Adebayo. — Ira Winderman, sun-sentinel.com, "ASK IRA: A seven-point plan for Heat success," 16 July 2019 As the puzzle pieces mature and mesh, the margin for error -- especially related to relievers, the lower half of the order and defense – makes the grind all that more grindy, the sweat equity invested in every win salty gold. — San Diego Union-Tribune, "Column: No matter pain of Cardinals loss, Padres remain interesting and in it," 30 June 2019 Location: Piermont, New York Price: $469,000 Don’t judge a book by its cover, because this two-bedroom, two-bath midcentury gem about 40 minutes north of Manhattan could be a gorgeous home with a bit of sweat equity. — Megan Barber, Curbed, "Midcentury fixer upper right outside of NYC asks $469K," 29 Aug. 2018 All the partners put in the sweat equity that turned a former hardware store into a brewery. — Kathy Flanigan, Milwaukee Journal Sentinel, "Vennture Brew Co. brings coffee and beer to Washington Heights neighborhood," 11 July 2018 My dad put in a tremendous amount of sweat equity into painting the multi-colored sticks in Hildi’s room. — Alyssa Fiorentino, House Beautiful, "7 Surprising Things You Didn't Know About Trading Spaces," 1 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'sweat equity.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of sweat equity

1950, in the meaning defined above

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More Definitions for sweat equity

sweat equity

noun

Financial Definition of sweat equity

What It Is

Sweat equity is the time and effort that people contribute to a project.

How It Works

Sweat equity is used to describe the non-financial investment that people contribute to the development of a project such as a start-up business. For example, sweat equity is counted from the founders of the company, as well as advisors and board members.

In many situations where some members of a partnership are contributing their money and others are spending time, the partnership may be composed of cash and non-cash (or sweat equity). Ultimately, sweat equity is rewarded the same as cash equity through a distribution of stock or other forms of equity in a start-up venture.

Sweat equity can also be considered literal. For example, a homeowner may spend time fixing, repairing, and renovating their home.  The value of their efforts is considered sweat equity and adds to the value of the home.

Why It Matters

Sweat equity is important to the successful start-up of a new venture, especially when cash is in short supply. However, it is important to value sweat equity carefully.  In early stages, it is easy to overvalue it, offering stock in exchange for effort. However, over time, such trades can become very expensive and erode the equity available to follow-on investors. Sweat equity should be measured in terms of the long term value of the effort, the long term commitment of the participants, and the value-added by the participants to the overall goals of the venture.

Source: Investing Answers

sweat equity

noun

English Language Learners Definition of sweat equity

US : value in a property, business, etc., that results from the work that a person does to improve it also : the work itself

See the full definition for sweat equity in the English Language Learners Dictionary

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