Which term describes using social media and websites to raise small amounts of money from many investors in exchange for rewards?

Which term describes using social media and websites to raise small amounts of money from many investors in exchange for rewards?

• A. Investment
• B. Crowdfunding
• C. Grant
• D. Subsidy

Answer: (B)

The term that describes using social media and websites to raise small amounts of money from many investors in exchange for rewards is crowdfunding. Crowdfunding leverages the collective efforts of a large number of people, typically through online platforms, to fund a project or venture. This approach allows individuals or businesses to present their ideas or products to a wide audience, who can then contribute small amounts of money, often in return for some form of reward, such as pre-orders of a product, exclusive updates, or unique experiences related to the project. Crowdfunding has gained popularity due to its ability to bypass traditional funding routes, making it accessible for startups and creators who might not have access to conventional financing. It creates a community of supporters and can help validate ideas before they are launched, effectively intertwining the process of funding with marketing. Other terms, such as investment, grant, and subsidy, do not accurately describe the mechanism of raising small amounts from many individuals in return for rewards. Investment typically involves acquiring an ownership stake in a company, grants are funds provided without needing to be repaid, usually for specific purposes, and subsidies refer to financial assistance given by the government to keep prices low or support certain activities. Thus, crowdfunding is the precise term that encapsulates the essence

The term that describes using social media and websites to raise small amounts of money from many investors in exchange for rewards is crowdfunding. Crowdfunding leverages the collective efforts of a large number of people, typically through online platforms, to fund a project or venture. This approach allows individuals or businesses to present their ideas or products to a wide audience, who can then contribute small amounts of money, often in return for some form of reward, such as pre-orders of a product, exclusive updates, or unique experiences related to the project.

Crowdfunding has gained popularity due to its ability to bypass traditional funding routes, making it accessible for startups and creators who might not have access to conventional financing. It creates a community of supporters and can help validate ideas before they are launched, effectively intertwining the process of funding with marketing.

Other terms, such as investment, grant, and subsidy, do not accurately describe the mechanism of raising small amounts from many individuals in return for rewards. Investment typically involves acquiring an ownership stake in a company, grants are funds provided without needing to be repaid, usually for specific purposes, and subsidies refer to financial assistance given by the government to keep prices low or support certain activities. Thus, crowdfunding is the precise term that encapsulates the essence