Which funding option involves pre-selling products on an online platform to raise capital?

Which funding option involves pre-selling products on an online platform to raise capital?

• A. Bootstrapping
• B. SBA loans
• C. Crowdfunding
• D. Investor

Answer: (C)

Raising capital by engaging a broad audience online through pre-orders is what crowdfunding is about. In this model, a campaign is hosted on an online platform and people fund the project in exchange for rewards, such as early access or the product itself. The money comes from many supporters, not a single lender or investor, and the product is typically delivered after the campaign succeeds. This approach lets you validate demand and finance production without giving up equity or taking on traditional debt. The other options don’t fit because bootstrapping uses personal funds, SBA loans are formal repayable loans, and an investor provides capital in exchange for equity or other terms rather than pre-selling rewards.

Raising capital by engaging a broad audience online through pre-orders is what crowdfunding is about. In this model, a campaign is hosted on an online platform and people fund the project in exchange for rewards, such as early access or the product itself. The money comes from many supporters, not a single lender or investor, and the product is typically delivered after the campaign succeeds. This approach lets you validate demand and finance production without giving up equity or taking on traditional debt. The other options don’t fit because bootstrapping uses personal funds, SBA loans are formal repayable loans, and an investor provides capital in exchange for equity or other terms rather than pre-selling rewards.