Question

Identify the correct statements about Crowdfunding.
(P) Funds are raised from high net-worth individuals.
(Q) Small contributions are raised from a large group of individuals.
(R) Funds are secured through the stock market.
(S) Funds are sourced from Reserve Bank of India.

• A. Only (P) and (Q)
• B. Only (Q) and (R)
• C. Only (R) and (S)
• D. Only (S) and (P)

Hint:

There are four main types of crowdfunding: Reward-based, Donation-based, Equity-based, and Debt-based (Lending)!

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Crowdfunding is a modern way of financing projects or businesses by raising small amounts of money from a large number of people, typically via the internet.
Step 2: Detailed Explanation:
Statement (Q) is the core definition of crowdfunding: gathering small sums from a "crowd."
Statement (P) is also correct in the context of "Equity Crowdfunding," where high-net-worth individuals or accredited investors buy a stake in a startup.
It does not involve the formal stock market (R), which is for public companies, nor the RBI (S), which is a regulatory central bank.

Step 3: Final Answer:
The correct statements are (P) and (Q), so the correct option is (a).