Although this is quite general and its certainly mentioned elsewhere, I think its relvant to mention that investee companyshould distinguish between equity/debt investors, their required return and expectations.
While equity investor will want to purchase part of your company and expect return generally no lower than 10% on a sale of that equity share, debt investor (Goverment, Bank) will loan you money with generally smaller interest rate.
What is also important is the fact that Equity investors often try to utilize its networks to help the company grow and prosper, while debt investors usually don’t care.
Additionally there is a convertible debt (convertible to equity), which is another, fairly common way of financing start up projects. This is actually giving the investor the protection of a creditor while having an unlimited upside potential as an equity holder (when debt is converted into equity).
This means as a creditor he has a downside protection in case of bankruptcy, where he has privileged right to assets, when company is liquidated. (Privileged to equity holders and also holders of lower tranches of debt (tranches of debt are sorted usually in Senior A,B,.. Junior A,B, etc. – more senior the debt means higher rights its holder has in case of liquidation))
However, when debt is converted to equity, as an equity holder he can sell its share for multiple of the price at which he has agreed to purchase it (subject to convertible debt contract).