Do you understand Crowdfunding? Test your general knowledge!

The least traditional form of pre-seed funding, crowdfunding is an innovative method of raising money from a large number of people.

But do you understand the different forms of crowdfunding available out there, and do you understand whether it might be right for your business?

Take the quiz to test your general knowledge on crowdfunding!

Crowdfunding is a way of raising money in small amounts from a large number of individuals, usually via the internet. It can occur in different shapes and forms, including:

Reward-based, Equity-based, Debt-based, or Donations as the main categories.

Using cryptocurrencies, for private initial coin offerings.

Gathering funds from “Friends, family & fools” abroad through online money transfers, notably using international money transfer platforms.

All of the above

1 / 7

True or False: Reward Crowdfunding allows investors to contribute to your venture in return for non-financial benefits.

True, when participating in a reward-driven crowdfunding campaign, investors, or “campaign backers” usually expect a reward in the form of goods or services at a later stage.

False – investors will always expect interest or equity in exchange for financial backing.

2 / 7

Reward crowdfunding is particularly relevant for:

Companies looking to develop tangible products - for example, games, big-budget films, design and technology projects; or hardware and product design projects.

Charities and other non-profit organisations looking to raise for a cause/ social or charitable projects.

Companies struggling to raise from a VC fund and looking to give away some equity in exchange for some funds as they are bootstrapping.

None of the above.

3 / 7

True or False – typically, reward crowdfunding involves pre-selling limited editions and exclusive access to products before they’re available on the market.

True – not only does a reward crowdfunding campaign give you the funding you need but also gets your product on to the market immediately, following production.

False – You should already be selling your product through official distributors before kicking off your crowdfunding campaign. How will people have a clear idea of what your product is about, otherwise?

4 / 7

Equity crowdfunding and debt crowdfunding are types of crowdfunding mechanism that are are…:

One and the same – they both offer investors shares in return for financial support, meaning a small stake in the business, project, or venture.

Quite different, with equity crowdfunding offering shares in the venture, while debt crowdfunding offers financial interest (provided a certain expected cash flow that will allow repayment.)

A sort of fad, as it is very unlikely that you’ll be able to generate any type of return on your investment in both cases.

None of the above.

5 / 7

Equity crowdfunding is ideal for…

Risk-averse Venture Capital funds and helping minimise the risk offering a co-investment mechanism through such a campaign.

Entrepreneurs looking to raise from family, friends and fools, using a clear and state-licensed mechanism to make sure all is in order.

Entrepreneurs who are looking for a large amount of capital to launch or grow their business; and already have viable operations with a solid consumer base.

Companies about to go public / IPO and trying to understand the demand for their stock by offering some capital using this crowdfunding mechanism.

Entrepreneurs looking to raise from

6 / 7

True or False – overall, crowdfunding is a simple marketing tool for your product / current (or future) company that requires little effort.

True – it’s effortless and will get you great visibility. So you might as well go ahead and click on that “Create Campaign” button!

False – the biggest mistake entrepreneurs can make is to launch a campaign without a clear plan of action. If you are not ready, no one will see or believe in your crowdfunding campaign. So make sure you prepare months ahead of clicking that “Create Campaign” button.

7 / 7

Error Occured

Idea

Do you understand Crowdfunding? Test your general knowledge!

Take the quiz to test your general knowledge on crowdfunding!

Crowdfunding is a way of raising money in small amounts from a large number of individuals, usually via the internet. It can occur in different shapes and forms, including:

True or False: Reward Crowdfunding allows investors to contribute to your venture in return for non-financial benefits.

Reward crowdfunding is particularly relevant for:

True or False – typically, reward crowdfunding involves pre-selling limited editions and exclusive access to products before they’re available on the market.

Equity crowdfunding and debt crowdfunding are types of crowdfunding mechanism that are are…:

Equity crowdfunding is ideal for…

True or False – overall, crowdfunding is a simple marketing tool for your product / current (or future) company that requires little effort.

Create Your Account Now

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Idea

Do you understand Crowdfunding? Test your general knowledge!

Take the quiz to test your general knowledge on crowdfunding!

Crowdfunding is a way of raising money in small amounts from a large number of individuals, usually via the internet. It can occur in different shapes and forms, including:

True or False: Reward Crowdfunding allows investors to contribute to your venture in return for non-financial benefits.

Reward crowdfunding is particularly relevant for:

True or False – typically, reward crowdfunding involves pre-selling limited editions and exclusive access to products before they’re available on the market.

Equity crowdfunding and debt crowdfunding are types of crowdfunding mechanism that are are…:

Equity crowdfunding is ideal for…

True or False – overall, crowdfunding is a simple marketing tool for your product / current (or future) company that requires little effort.

Create Your Account Now

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Convertible Note Calculator

Course: What is crowdfunding and how can you unlock its potential?

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Course: What Are Convertible Notes and Its Value To Your Business?

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Fundraising & Funding Sources In The UAE: Angel Investors & VC Funding

Fundraising & Funding Sources In The UAE: Bank financing & Government-funded programs

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The most unusual source of startup funding: Crowdfunding

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Equity-based Crowdfunding VS. Reward-based Crowdfunding

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