CMA Intermediate · Financial Management and Business Data Analytics · Sources of Finance
A start-up raises money by pooling small contributions from a large number of individuals through an online platform, in return for rewards or equity. Which modern source of finance is this?
This is crowdfunding. It raises small amounts from a large number of individuals through an online platform, in exchange for rewards, debt or equity, and is widely used by start-ups and small projects.
- ACrowdfundingCorrect
- BFactoring
- CDebenture trusteeship
- DSale and leaseback
Explanation
Crowdfunding collects small amounts from many people via an internet platform, for rewards, debt or equity. Factoring is selling receivables, and sale and leaseback involves selling an owned asset and leasing it back. A debenture trustee protects debenture holders and is not a funding source.
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