Funding gaps often exist due to a combination of factors, including:
Market Risk: Investors may perceive startups as high-risk due to uncertain market conditions. Information Asymmetry: Investors may lack sufficient information about the startup's potential, leading to hesitation in providing funds. Insufficient Collateral: Many entrepreneurs lack the assets required to secure traditional loans. Limited Track Record: New ventures often lack a proven business history, making it difficult to convince investors of their viability.