IGNOU BCOS 185 2026 - Explain the significance of Venture Capital in financing a start

Question

Explain the significance of Venture Capital in financing a startup. How does it differ from traditional bank financing?

12 Feb 2026

Answer :

Word Count : 278

Venture capital plays a crucial role in financing startups, especially those with high growth potential but limited access to traditional funding sources. Startups often face significant risks and uncertainty in their early stages, making it difficult for banks to lend them money due to strict collateral and repayment requirements. Venture capital provides the necessary funds in exchange for equity, allowing entrepreneurs to focus on growth rather than immediate debt repayment. This funding is not just

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