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"As the risk profile of a modern startup is likely different in its seed, early, mezzanine,...

"As the risk profile of a modern startup is likely different in its seed, early, mezzanine, and later stage, venture capital is only effective way to grow a business."

***How true is this statement?**

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Answer #1

True. Venture capital is used to fund a startup with long term growth potential but initially the risk in a startup is very high and for it to be profitable it might need a grace period. Venture capital provides all of this but a higher rate than banks. Banks would require interest which would eat away any profit initially by the startup. Moreover, fund flow only after certian time but banks don't give more grace period.
VC also provides managerial and technical supports to startups based on their experience which helps in scaling up their business. The startups can use their experience to build a sustainable business.

Please Discuss in case of Doubt

Best of Luck. God Bless
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