Good question but than the answer might be something like: “Do we need sparkling water?” no seriously… We definitely need VC!
VC is evolution of the capital flow and this is one of the most important source of money injection for any startup. VC are paid for analyzing the deals. Where banks fail there is a VC firm.
VC firms get money from:
- private investors
- family offices
- University funds
- Mutual funds
- Private or Publicly traded companies
VCs have partners. Banks don’t have partners. Translated into work. VC works very hard to make sure that the money are invested well. They deal with smaller transactions than the investment bankers. IF the VC firm does any deal the risk vs return on investment might be significantly higher than on the banking side. VC are willing to risk more than bankers.
VC are mostly get you experience,connections and advice which are mostly more than money. They want and should help you. If you work for large investment bank and you want to provide the same as VC (experience, connections and advice ) you are legally tight to focus on the money part only