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
Correct answer
D
Neither 1 nor 2
Explanation
SEBI's consultation paper describes crowdfunding as soliciting small amounts of money from many investors through a web-based platform or social network for a specific project. It lets SMEs and start-ups raise funds at a lower cost of capital without the rigorous procedures of a public issue. Both statements are correct.
Financial MarketsAlternative finance: crowdfundingCrowdfundingSMEsStart-upsSEBICost of capital