Private equity / venture capital has numerous advantages over other forms of financing. The most popular method of financing - a bank loan - requires collateral and burdens the company with regular interest and principal payments, which in turn require consistent and high liquidity. Generally, a startup company or a company that already has debt will find it hard to obtain a bank loan. A trade investor usually takes control of the acquired company, incorporates it into its structures and makes it adjust to its rules and objectives. This usually means a loss of independence for the company and its managers. Initial public offerings (IPOs) are not very popular among small and medium-sized companies in Poland, as they are costly and time consuming. Besides, the ability to obtain capital in this way depends on the condition of the stock market.

How does private equity / venture capital compare? The VC investor becomes a partner - taking on the risk of the investment together with other shareholders. The investor's aims are fully congruent with the aims of the other owners and the company's management, i.e., to see the company grow and to increase its value within a few years. This is because the venture capitalist only makes money if the other owners make money - i.e., by the growth in value of the company's shares. The VC investor carefully calculates the risk but is also prepared to invest in companies that would be refused bank financing. What is more, PE/VC financing does not burden the company with heavy interest payments.

Venture capital is long-term capital, as investors usually look to retain their involvement for between three and seven years. Because they are shareholders, VC investors seek to help companies in both good and difficult times. They are patient and flexible investors, who know that it takes time to achieve desired results and that even good companies can experience temporary setbacks. They are also ready to finance further investment if necessary. Moreover, while debts are an obstacle to further credit, VC investment actually improves the debt to equity ratio and increases a company's credit rating.

Venture capital is not just about money. By entering into cooperation with a PE/VC fund a company gains an experienced partner that is well-connected and is used to thinking long-term. Having analyzed thousands of investment projects, researched hundreds of businesses and worked with countless companies, VC investors have rich experience that is worth tapping into. Moreover, they have broad contacts in the business world and among financial institutions, consulting companies, and law firms. That is why they can truly be of assistance and, furthermore, bring a new level of credibility to the company. VC investors also monitor a company's activities, especially from the financial perspective, which allows them to identify possible problems early on and to work with the company to solve them. It is the combination of money, experience and long-term involvement in the company that makes venture capital attractive.