Debt investors offer loans to startups that have to be repaid in full, and they are paid a fixed interest fee in return. The risk when things go bad is therefore with the entrepreneur. 

While equity investors require the money they invested to be paid back on a monthly basis, debt investors are more flexible. As soon as the company is listed on the stock exchange, they will earn their money back.

The more successful the startup, the happier the equity investor. For debt investors, however, the success of the startup does not impact their returns.

Equity investments offer money to the entrepreneur in return for a share of the company. When things go bad for the startup, the risk is therefore shared between all the shareholders of the company.