This is part two of my answer to this question. Loan collateral includes identifiable business and personal assets, such as your land and building, vehicles, and machinery. Investor collateral is created by people having control of your company. If you can't pay, the banker can take your assets and sell them. If you don't hit your growth milestones, the investor can take over your company.
Venture investors tend to select one of two ownership control concepts.
They either take a minority interest in the company that can increase if profitability targets aren't met, or they start with a controlling interest that declines as financial targets are met. Capital is risk-sharing. Equity capital measures how much the owners have risked in the company. Equity is a cushion to absorb losses. Debt capital must be repaid in good and bad times.