Convertible Notes and Startup Funding
February 12, 2025
The liquidity management paradigm in the commercial banking industry has undergone a drastic change. At one time, liquidity management was driven by constraints such as cut-off times and end-of-day processing. However, with the passage of time, the industry has witnessed continuous technological advancement. The industry now has the infrastructure as well as the regulatory mechanism […]
As far as technology enthusiasts are concerned, blockchain is the most important invention since the wheel! It is very easy to find literature where technical gurus are praising blockchain as being the solution to all technology-related problems being faced by mankind. This overenthusiasm is the reason that most people believe that blockchain will revolutionize many […]
In 1971, Richard Nixon single-handedly took the world off the gold standard. Ever since, many commentators have been of the opinion that the monetary system of the world will face a complete collapse. These fears get exaggerated every time there is a crisis. For instance, during the 2008 crisis, many people felt that the dollar […]
In the previous articles, we have already seen how important cash flow is for the retail sector. We have also explained how the lack of adequate cash flow can be a cause of concern and even causes many retail businesses to shut down. However, the fact that retail businesses have cash flow issues is an […]
We studied the different methods to calculate the free cash flow to the firm (FCFF) in the previous articles. In this article, we will learn about how to derive free cash flow to equity (FCFE). Here too there are multiple methods involved. However, since we already have a background in calculating cash flows, we need […]
The internet has enabled the functioning of various new types of business models. The peer-to-peer business model is one such business model which has recently come into existence. Companies such as Outdoorsy and BlaBlaCar have transformed the way in which individuals and small businesses interact with one another. LinkedIn is one of the biggest names which has emerged from the peer-to-peer model.
It is important for any budding entrepreneur to be aware of what a peer-to-peer business model is and how it actually works. In this article, we will explain the functioning of this business model and also explain its pros and cons.
The peer-to-peer business model is a type of business model in which technology is used to connect multiple individuals to each other. The idea is that technology is used to connect different people who belong to the same homogenous group. Since people belonging to the same group are called peers, the technology is called peer-to-peer technology.
The buyer and the seller are generally private individuals who sell goods and services on their own. These platforms are not very useful for larger companies that own the means of production. The only company which is involved in the entire process is the intermediary company that connects both sides. More often than not, the intermediary company is just a technology interface.
The intermediary company facilitates the transaction by making it quicker and safer. Also, the intermediary plays the role of a middleman when it comes to facilitating payments.
The peer-to-peer business model is multi-faceted. It allows companies to create several types of businesses such as marketplaces, crowdsourcing, and multi-sided platforms.
Different peer-to-peer companies make money in different ways. The revenue models which are most commonly used by such companies have been listed below:
The various advantages of the peer-to-peer model which are commonly mentioned, have been explained below:
The fact of the matter is that peer to peer model is quickly catching up. Right now, this model has not created as many unicorns and billion-dollar companies as some of the other models. However, more start-ups are innovating using this business model. Hence, it is likely to witness high growth in the immediate future.
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