Q. Which of the following statements about Crowdfunding is/are correct?
1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.
2. Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.
Select the answer using the code given below :
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer : C

Explanation:

Statement 1 is correct: Crowdfunding is defined as "solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project, business venture or social cause."
Statement 2 is correct: Crowdfunding enables SMEs and startups to raise funds at a lower cost of capital without undergoing the rigorous procedural requirements of traditional capital markets such as IPOs or bank loans, making it an accessible alternative financing mechanism.

Source:

https://www.sebi.gov.in/sebi_data/attachdocs/1403005615257.pdf