There are several reasons why the funding gap exists:
Risk Aversion: Investors often prefer to invest in established businesses rather than startups due to the high risks involved. Information Asymmetry: Investors may not have enough information to accurately assess the potential of a new venture. Lack of Collateral: Many startups lack the collateral required to secure loans from traditional financial institutions. Market Conditions: Economic downturns and market instability can make investors more cautious.