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Manny's Cookies, LLC wants to launch a Kickstarter Campaign to crowdfund a new product line. All backers who fund the project will receive 1% equity for each US$1000 funded, up to a total of 5% equity. Kickstarter has told Manny's Cookies the project will not be allowed because it violated the Kickstarter rules. Which rule was violated?

Kickstarter does not allow monetary rewards or equity in a company as incentive to back a project.

Which of the following statements is true?

98% of startup businesses begin without any formal investment.

______ is the process of raising capital for a new venture from a large audience, typically through the Internet.

Crowdfunding

Which of the following is true about crowdsourcing?

Crowdsourcing is a form of bootstrapping, because it is a valuable method of saving money.

Crowdcube, Circle Up, and OurCrowd are examples of what type of crowdfunding site?

Equity crowdfunding

When it comes to crowdfunding, which of the following is NOT true?

If you create your crowdfunding campaign effectively, potential backers' questions will be answered through the campaign, saving you from answering a lot of emails.

Which of the following is considered to be an advantage of crowdfunding?

It can provide you with an idea of the level of enthusiasm and interest in your product or service before launch.

Which of the following is a common crowdfunding mistake?

Not having enough presence on social media, limiting your exposure to potential backers

Which of the following is a common bootstrapping strategy?

Offer discounts to early customers to ensure a consistent cash flow

Which of the following is true about the type of people who tend to back crowdfunding campaigns?

Project backers tend to have an annual income over US$100,000.

Which of the following is the best definition of bootstrapping?

The process of building or starting a business with very little funding or capital or virtually nothing at all

What is the purpose of bootstrapping?

To save money in creative ways

In the ______ model of crowdfunding, funds are offered with the expectation the money will be repaid.

lending

In the ______ model of crowdfunding, funds are offered without the expectation of a direct return for the funding.

patronage

Kickstarter is an example of a crowdfunding site in the ______ model.

reward-based