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 :

Correct Option: (c) Both 1 and 2

The correct option is (c). Both statements 1 and 2 are correct. Crowdfunding is formally defined as the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via web-based platforms or social networking sites (Statement 1). It enables Small and Medium Enterprises (SMEs) and startups to access alternative financing channels and raise capital at a potentially lower cost of capital and with lesser bureaucratic friction compared to traditional institutional banking procedures (Statement 2). Therefore, options (a), (b), and (d) are incorrect because they reject either statement 1 or statement 2.