Venture capital, also translated as venture capital, is mainly a financing method to provide financial support for start-ups and obtain shares in the company. Venture capital is a form of private equity investment.

Direct financing is the symmetry of indirect financing. A financing method without the intervention of financial intermediaries. In this financing mode, in a certain period of time, the capital surplus unit will provide monetary funds to the demand unit through direct agreement with the demand unit or purchase the securities issued by the demand unit in the financial market.

Commercial credit, stocks and bonds issued by enterprises and direct loans between enterprises and individuals all belong to direct financing.

Indirect financing means that there is no direct relationship between capital surplus units and capital shortage units, but independent transactions with financial institutions, that is, capital surplus units provide their temporarily idle funds to these financial intermediaries through deposits or purchases of securities issued by financial institutions such as banks, trusts and insurance.

Then, these financial institutions will provide funds to these units in the form of loans and interest subsidies. , or through the purchase of securities issued by units that need funds, so as to realize the process of financing.

2. Different forms

Direct financing is a direct financing market, also known as the securities market. Direct financing can absorb social hot money as much as possible and directly invest in the production and operation of enterprises, thus making up for the shortage of indirect financing. Indirect financing is a process in which financial institutions provide funds to units that need funds in the form of loans and interest subsidies. , or through the purchase of securities issued by these units, so as to achieve financing.

3. Different characteristics

Directness In direct financing, the fund demander directly obtains funds from the fund supplier, and establishes a direct creditor-debtor relationship between the fund supplier and the fund demander.

Decentralized direct financing is carried out among countless enterprises, between governments and enterprises and individuals, between individuals, or between enterprises and individuals. Therefore, financing activities are scattered in various occasions, with a certain degree of dispersion.

Indirectness In indirect financing, there is no direct lending relationship between the fund demanders and the initial fund suppliers. Financial intermediaries act as a bridge between capital demanders and initial suppliers. The initial fund suppliers and fund demanders only had financing relations with financial intermediaries.