Principles of finance 7 | Business & Finance homework help
This strategy is different than traditional debt structures because it involves more risk and higher returns; venture capitalists are incentivized by high return investments, so they must believe there’s great potential for success before investing in any startups. As such, they are willing to accept greater risks than banks or other lenders who usually require collateral and lower-risk loan repayment schedules. Additionally, private investors will often provide mentorship services along with their funds – which can be extremely helpful when starting a new business.