Share capital is the total amount of cash contributed by shareholders to the company. It is typically divided into authorised capital (maximum amount that can be raised) and issued capital (amount actually raised).

Example/Scenario: A start-up tech firm raises £2 million in share capital from angel investors, who receive equity in return for their investment. The firm issues 1 million shares at a nominal value of £1 each and collects a premium of £1 per share, bringing the total share capital to £1 million.