Question 1

Which crowdfunding platform focuses on science-related projects?

Accepted Answer

RocketHub has a specific category for science-related projects called "LaunchPad," where scientists, researchers, and innovators can showcase their projects and seek funding from the community.

Question 2

When should you begin broadcasting your product to attract an audience?

Accepted Answer

It is never too early to start promoting and building hype around your product. By starting early, you can generate interest and potentially secure pre-orders or early adopters. Waiting until your product is ready to ship or even in production may result in missed opportunities to gain traction and establish a customer base.

Question 3

Crowdsourcing would be the fastest way of raising financial capital for your business.

Accepted Answer

Crowdsourcing is a method for gathering information or input from a large group of people, typically via the internet, rather than raising financial capital. For raising financial capital quickly, methods such as venture capital, angel investors, or crowdfunding platforms might be more effective.

Question 4

According to the text,in the crowdfunding model,the ______ is everything.

Accepted Answer

According to the text, in the crowdfunding model, the video pitch is everything.

Question 5

Which of the following accurately describes a major advantage to crowdfunding?

Accepted Answer

Crowdfunding provides options beyond giving up equity in the company in order to receive funding. This allows entrepreneurs to maintain more control over their company and its direction.

Question 6

As recent studies have shown,projects with spelling mistakes are how much less likely to be successful than projects without?

Accepted Answer

Spelling mistakes can make projects appear unprofessional and less credible, which can lead to a decrease in success rates.

Question 7

Lorraine offers to give people a percentage of the profits earned from her theater production as a reward for donating $100 to the production's equipment.Kickstarter did not approve her campaign because ______.

Accepted Answer

Kickstarter does not allow campaigns to offer equity or financial returns as rewards, as it violates their rules on fundraising and investment. Therefore, Lorraine's offer to give a percentage of profits as a reward for donations would not be allowed on the platform.

Question 8

If you have a successfully crowdfunded product and you know you are going to miss your advertised ship date,what should you do?

Accepted Answer

Being honest and transparent with your backers and notifying others through the crowdfunding site is the best choice. This will avoid negative feedback and loss of credibility in the long run. It is important to keep your backers updated on the progress and the reasons for any delay. This will foster trust in your brand and ensure that your backers understand the situation.

Question 9

When borrowing from friends and family,it is better to treat the arrangement as a formal loan.

Accepted Answer

It is recommended to treat borrowing from friends and family as a formal loan to avoid misunderstandings and maintain healthy relationships. This includes setting a repayment schedule, specifying interest rates (if any), and documenting the agreement with a written contract.

Question 10

If you cannot convey your product or service idea to your audience of prospective financial backers in a few short sentences,you should ______.

Accepted Answer

If you cannot convey your product or service idea in a few short sentences, it is likely that the essence of your product is not clear. Spending time getting a clearer sense of the essence of your product can help you convey your idea more succinctly and effectively. Providing a detailed business plan document or abandoning your idea may not be necessary at this stage. Reminding your audience that they are missing out on a unique opportunity may come across as pushy or desperate, and is unlikely to help you convey your idea more effectively.

Question 11

Research has shown that what percentage of crowdfunded products are delivered later than expected?

Accepted Answer

Research indicates that approximately 75% of crowdfunded products are delivered later than their original promised timelines, highlighting the challenges and uncertainties in product development and fulfillment in crowdfunding projects.

Question 12

Greg is using a fundraiser site and is offering 10 shares of stock to those who contribute a minimum of $100 to his product.What model of crowdfunding is Greg using?

Accepted Answer

Greg is using the investor model of crowdfunding because he is offering shares of stock in exchange for contributions, which means contributors become investors in his product.

Question 13

As described in the text,one of the problems with the Coolest Cooler and its Kickstarter campaign was that ______.

Accepted Answer

The text mentions that one of the problems with the Coolest Cooler and its Kickstarter campaign was that supporters lost faith over delayed production.

Question 14

In the patronage model,investors will contribute to your project with no expectation of direct return.

Accepted Answer

In the patronage model, investors support a project out of goodwill towards the project or its creator, without expecting direct financial gain.

Question 15

Crowdfunding entrepreneurs should set a funding target that is ______.

Accepted Answer

A realistic funding target is important to attract backers and cover costs, but it should not be too low as to hinder the success of the project.

Question 16

Kevin is about to launch a crowdfunding campaign and posts a request on his Facebook page,asking people to share their experiences on crowdfunding sites.What element of conducting a campaign is Kevin observing?

Accepted Answer

Kevin is seeking advice and feedback from others who have experience with crowdfunding sites. This shows that he is taking the time to learn and improve his campaign before launching it, which is a wise approach.

Question 17

In the investor model,crowdfunding backers will expect an equity stake in your business.

Accepted Answer

In the investor model of crowdfunding, backers are investing in the business and therefore expect an equity stake in return.

Question 18

When conducting a crowdfunding campaign,why is it important to talk to others who have used crowdfunding?

Accepted Answer

Talking to others who have used crowdfunding can help you learn from their experiences and avoid making the same mistakes they did. It can also help you identify best practices and strategies to make your campaign successful. Engaging them in your own campaign or gaining information about their product or service may be helpful, but the main benefit is learning from their crowdfunding experiences. The option of someone wanting to buy your business is not a typical outcome of a crowdfunding campaign.

Question 19

Which crowdfunding platform allows its patrons to fund illustrators,authors,podcasters,musicians,and other independent creators?

Accepted Answer

Patreon is specifically designed for creators and allows patrons to fund a variety of independent creators including illustrators, authors, podcasters, musicians, and more.

Question 20

You would like to raise funds for a foodbank in your local community.Kickstarter would be an excellent source for the initial funds.

Accepted Answer

Kickstarter is designed for creative projects such as films, games, and technology, not for charity or personal fundraising efforts.

Quiz 12: Bootstrapping and Crowdfunding for Resources