Venture capital financing needs no collateral and no guarantor. It looks better than bank loans, but it is not. What venture capital wants is the company's equity, and the equity itself is a very precious mortgage. If a company does not operate properly in venture capital financing, the enterprise may not be its own after a large amount of financing or multiple rounds of financing. The bigger the enterprise does, the more the venture capital benefits. In the long run, venture capital will be bad for enterprises.
Banks are more realistic. What banks want is interest. A loan from a bank can guarantee the integrity of the company. The operation of the company will not be interfered by others. Once the company is on the right track, all the income belongs to itself. However, if you want to borrow money from a bank, you need a guarantor or collateral. For some newly established enterprises, it is difficult to meet the loan conditions. But on the whole, the impact of bank loans on the development of enterprises will be smaller, and they can also guarantee their absolute right to speak to the company.
Venture capital values the future development of the enterprise, not the interest generated by borrowing, but hopes to maximize its own income by mastering the equity. Bank loans are more concerned with the safety of funds, so they only charge interest generated by borrowing. As long as the loan can be recovered safely, it is enough to earn some interest. These two financing methods have their own advantages and disadvantages, and it is best for enterprises to understand the differences before making a decision.