Investopedia

Funding Gap

Dictionary Says

Definition of 'Funding Gap'

The amount of money needed to fund the ongoing operations or future development of a business or project that is not currently provided by cash, equity or debt. Funding gaps can be covered by investment from venture capital or angel investors, equity sales, or through debt offerings and bank loans.

Most often used in context with early-stage companies during the initial stages of research, product development and marketing.


Investopedia Says

Investopedia explains 'Funding Gap'

The ease with which a very young company receives funding depends on many factors including the viability of the business model, barriers to entry for that particular industry, and overall economic and market conditions. When the stock markets are strong, venture capital investors are much more likely to fund startup companies, and may even become less stringent in their eligibility criteria.

Funding gaps are also more likely at these early stages because a company won't know what its full operating expenses will be until it reaches a more mature stage and, at first, there aren't likely to be any meaningful revenues coming in.

Articles Of Interest

  1. Cashing In On The Venture Capital Cycle

    Find out how VC firms make the market go round, and round and round.
  2. How To Interpret A Company's Prospectus

    Learn to decipher the secret language of the prospectus - it can tell you a lot about a company's future.
  3. What are the sources of funding available for companies?

    Despite all the differences among companies, there are only a few sources of funds available to all firms. 1. They make profit by selling a product for more than it costs to produce. This is ...
  4. 7 Unconventional Ways Businesses Can Borrow Money

    Find out how your business can get the money it needs - even when the bank says "no".
  5. Should You Head Back To Business School?

    Find out if an MBA is necessary for you to reach your professional goals.
  6. Women And Finances: Is There A Gender Bias?

    Uncover some very complex reasons for female gender biases in the finance world.
  7. Female Entrepreneurs Are Surpassing Their Male Counterparts

    The world of entrepreneurship is constantly changing; the last year has seen a significant shift in the performance of female entrepreneurs.
  8. Small Business: Speed Up Receivables To Avoid A Cash Crunch

    Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
  9. Build Your Small Business During Downswings

    Here we offer some cost-saving measures to strengthen your business even when the market is weak.
  10. In Small Business, Success Is Spelled With 5 "C"s

    Incorporating these steps will help your business thrive in a competitive market.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  2. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  3. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  4. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
  5. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
  6. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.
Trading Center