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:

Option (C) — Both 1 and 2

• Crowdfunding involves raising small amounts of capital from a large number of individuals, typically via internet-based platforms or social networking sites, to finance a specific project, business venture, or cause.
• SMEs benefit from crowdfunding as it allows them to access capital without the rigorous regulatory and procedural requirements of traditional financing methods such as IPOs or bank loans, often at a lower effective cost of capital.
• SEBI has issued consultation papers on crowdfunding in India, recognizing it as a mechanism for startups and SMEs to raise funds.

• 1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project: Correct. This is the standard definition of crowdfunding.
• 2. SMEs are able to raise funds at lower cost of capital without undergoing rigorous procedures: Correct. Crowdfunding enables SMEs to bypass traditional fundraising hurdles and access capital more easily and often at lower cost.