What is the core characteristic distinguishing Venture Capital from traditional bank debt for a startup?

💡 Explanation:

Venture Capital (VC) is a form of equity financing where the investor, a venture capitalist, receives an ownership stake (equity) in the company in return for the capital. This means the return for the VC depends on the company's growth and profitability (realized via an exit like an IPO or acquisition). Traditional bank debt is a loan that must be repaid with interest regardless of the business's success or failure, and it does not involve an ownership stake.