Traditional banks aren't in the business of taking risks. That's not their function. They exist to finance things and that is why their upside is mostly limited

Traditional banks aren't in the business of taking risks. That's not their function. They exist to finance things and that is why their upside is mostly limited. I've personally experienced this recently trying to borrow money to acquire an asset: banks will throw money at you hand over fist, at amazingly cheap rates, if you structure things so that it's very very unlikely they will lose their money. If you set up a company tomorrow with no assets, no cashflow, no nothing. Just an idea. And you go ask for a $100,000 loan. Why should a bank give you a loan, given most businesses fail? It's 10 to 100x more risky to give a loan to a startup like that, than it is to give a loan to a profitable business that has existing cashflow and profits. Even if the interest rate is 20% for the startup and 3% for the established company.