AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Understand Incentives to Navigate Funding Structures
Funding structures vary significantly in terms of regulation and incentives, influencing the behavior of the parties involved. Banks, heavily regulated institutions, operate with customer deposits while private credit funds, which are less regulated and often consist of pooled capital from institutional investors, have locked-in capital for extended periods. The light regulation on private funds leads to different incentives; fund managers will avoid acknowledging significant losses, especially when fundraising for new ventures, to maintain a favorable perception and attract investors.