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 :
Options
📖Detailed Explanation
Explanation:
Statement 1 is correct: Crowdfunding refers to a financing method where individuals or institutions contribute small amounts of money through web-based platforms or social networking sites to fund specific ventures, startups, or social causes.
Statement 2 is correct: Crowdfunding allows Small and Medium Enterprises (SMEs) and startups to raise capital without relying heavily on traditional banking channels. It often involves lower transaction costs, reduced dependency on collateral, and fewer procedural barriers, thereby effectively lowering the cost of capital compared to conventional financing methods.
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