Definition of Funding gap:
A funding gap is the amount of money needed to fund the ongoing operations or future development of a business or project that is not currently funded with 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.
The term is most often used during the initial stages of research, product development, and marketing of early-stage companies. Funding gaps are commonly realized in companies within the pharmaceutical and technology industries, which rely heavily on research and development.
A shortfall in capital needed to fund future operations or projects. The gap may be closed with debt instruments or equity participation. Often this situation occurs in industries that rely on research and development to bring products to market, such as the pharmaceutical or technology industries.
How to use Funding gap in a sentence?
- Funding gaps are common for early-stage companies as it is difficult to accurately estimate future operating expenses and profit margins are narrow.
- A funding gap occurs when there are not enough funds to finance operations or future development projects.
- Funding gaps can be addressed by seeking investors and/or securing additional capital through equity or debt financing.
Meaning of Funding gap & Funding gap Definition