Question 1

What is the characteristic of the lending model of crowdfunders?
A)investors provide financial support with no expectation of direct return
B)investors are rewarded for their financial support
C)equity is exchanged for the contribution
D)funds are treated as loans

Accepted Answer

In the lending model of crowdfunding, funds are treated as loans, meaning that the money provided by investors is expected to be paid back, often with interest.

Question 2

Of the following, what best describes the value of crowdfunding?
A)Projects are easy to conduct.
B)There are various options to funds other than giving a part of the company away.
C)It is relatively risk free.
D)It is the easiest way to get worldwide recognition.

Accepted Answer

Crowdfunding allows for projects to be funded without giving up equity in the company, providing options to retain full ownership and control. This can be especially beneficial for early-stage startups. While it may not be completely risk-free, it can help mitigate financial risks by allowing for smaller investments from many individuals rather than relying on large sums from a few investors. While crowdfunding can help gain exposure and a customer base, it is not necessarily the easiest or guaranteed way to achieve worldwide recognition.

Question 3

What should be done by an entrepreneur who expects a successful crowdfunding campaign?
A)Offer samples of the product so that the investor can have a hands-on experience with the product.
B)Test the product with a survey or beta test prior to the campaign.
C)Set up links with suppliers, distributers, and warehouses before launching the product on a crowdfunding site.
D)Prepare for a backup fundraiser plan.

Accepted Answer

The answer of What should be done by an entrepreneur...

Question 4

What is the characteristic of the investor model of crowdfunders?
A)investors provide financial support with no expectation of direct return
B)investors are rewarded for their financial support
C)equity is exchanged for the contribution
D)funds are treated as loans

Accepted Answer

The answer of What is the characteristic of the investor...

Question 5

Which of the following is NOT one of the basic rules of Kickstarter?
A)Projects must create something to share with others.
B)Projects must launch products within two months.
C)Projects must be honest and clearly presented.
D)Projects cannot fund-raise for charity.

Accepted Answer

Kickstarter does not have a specific timeframe requirement for when projects must launch their products, but they do require honesty and clear presentation, that projects must create something to share with others, and that they cannot fund-raise for charity.

Question 6

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:
A)it was a theater production and not a product
B)she wanted to offer a financial reward
C)she was asking too much of an investment, given the reward
D)she was asking too little of an investment, given the reward

Accepted Answer

Kickstarter does not allow campaigns to offer financial returns or equity in a project, as it goes against their reward-based model.

Question 7

According to the textbook, which is the most established crowdfunding site?
A)Kickstarter
B)Quirky
C)Indiegogo
D)Rockethub

Accepted Answer

Kickstarter is the most established crowdfunding site, having been founded in 2009 and raising over $5 billion for projects. It is also the largest platform and has the most users, making it a popular choice for both creators and backers.

Question 8

What should be done by an entrepreneur who expects a successful crowdfunding campaign?
A)Know and plan how to deliver the product to a large group of consumers.
B)Offer samples of the product so that the investor can have a hands-on experience with the product.
C)Test and refine the idea so that the product is clear and the investor knows what problem the product solves.
D)Test the product with a survey or beta test prior to the campaign.

Accepted Answer

The answer of What should be done by an entrepreneur...

Question 9

Why is it important to talk to others who have used crowdfunding?
A)You will get a better idea of what to do and what to avoid in your campaign.
B)You can engage them in your own campaign.
C)You can gain valuable information about their product or service.
D)It is a networking opportunity.

Accepted Answer

Talking to others who have used crowdfunding can provide valuable insight into what worked well and what didn't in their campaigns. This can help you avoid common mistakes and optimize your own campaign strategy for success.

Question 10

Greg is using a fundraiser site and is offering 10 shares of stock to those who contribute a minimum of $100 dollars to his product.What model of crowdfunding is Greg using?
A)investor
B)patronage
C)reward
D)lending

Accepted Answer

Greg is using the investor model of crowdfunding, where contributors receive equity or shares in the company in exchange for their financial support.

Question 11

What should be done with the product concept in order to conduct a successful campaign?
A)Provide schematic designs or service examples so that the product is clear.
B)Offer samples of the product so that the investor can have a hands-on experience with the product.
C)Test and refine the idea so that the product is clear and the investor knows what problem the product solves.
D)Test the product with a survey or beta test prior to the campaign.

Accepted Answer

Testing and refining the idea ensures clarity and demonstrates the problem-solving capability of the product, which is crucial for a successful campaign.

Question 12

What unique way did international singer Verity Price use to engage her audience?
A)She told an emotional story of her start as a singer.
B)She raised funds exclusively in other countries.
C)She built relationships with her customers by allowing them to vote on the songs she should include in her album.
D)She provided online scores to her album music.

Accepted Answer

Verity Price built relationships with her customers by allowing them to vote on the songs she should include in her album. This unique way of engaging her audience not only gave them a sense of involvement in the creative process but also increased their loyalty to her as an artist.

Question 13

One of the problems with the Coolest Cooler was that:
A)the USB charger caused electric shocks to several customers
B)shipping was too expensive for more customers
C)supporters lost faith over delayed production
D)they crowdfunded on multiple sites, betraying community guidelines

Accepted Answer

The Coolest Cooler experienced delays in production, causing supporters to lose faith in the project. This resulted in negative feedback and damage to the company's reputation.

Question 14

Which of the following is NOT a crowdfunding mistake?
A)setting a realistic funding goal
B)having no, or little, social media presence
C)failure to deliver the product or rewards after the campaign is over
D)choosing the wrong crowdfunding platform

Accepted Answer

Setting a realistic funding goal is not a mistake, it is important to have a clear and achievable target for your campaign.

Question 15

Gerry is working on getting the description of his product down to two sentences.He also tries out his pitch with people who have not heard of his product before.What element of conducting a campaign is Gerry observing?
A)set the right fundraising goal
B)practice the pitch
C)seek and accept advice
D)get the campaign started

Accepted Answer

Gerry is practicing his pitch, which is an important element of conducting a campaign. A clear and concise pitch can help attract potential supporters and investors. The other options (A, C, and D) are not related to what Gerry is currently doing.

Question 16

What is the characteristic of the reward model of crowdfunders?
A)investors provide financial support with no expectation of direct return
B)investors are rewarded for their financial support
C)equity is exchanged for the contribution
D)funds are treated as loans

Accepted Answer

The characteristic of the reward model of crowdfunders is that investors are rewarded for their financial support. This can come in the form of early access to the product or service being funded, discounted prices or other incentives. Option A is incorrect because investors often expect some form of reward or incentive for their financial support. Option C refers to the equity model of crowdfunding, not the reward model. Option D describes a different type of funding model altogether.

Question 17

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?
A)set the right fundraising goal
B)practice the pitch
C)seek and accept advice
D)get the campaign started

Accepted Answer

Kevin is seeking and accepting advice by asking people to share their experiences on crowdfunding sites.

Question 18

Crowdfunding that gives backers the opportunity to become shareholders in a company is called ____________.
A)crowdsourcing
B)shared entrepreneurship
C)professional fund management
D)equity crowdfunding

Accepted Answer

Equity crowdfunding allows backers to become shareholders in a company, giving them a potential financial return on their investment. Crowdsourcing refers to obtaining services or ideas from a large and diverse group of people, shared entrepreneurship is not a commonly used term, and professional fund management involves managing investments on behalf of clients.

Question 19

The site Crowdcube is unique for which of the following reasons?
A)It is headquartered in Great Britain.
B)It offers a professional fund manager to monitor the money invested by international investors.
C)It invests only in Israeli startups.
D)It was the first international equity crowdfunding site.

Accepted Answer

The answer of The site Crowdcube is unique for which...

Question 20

What should entrepreneurs do in communicating about their product during a crowdfunding campaign?
A)Communicate the message of your product in no more than two sentences.
B)Cescribe the details of your product so that it is distinct from similar products.
C)Provide images and pictures of the product or service.
D)Provide flexibility in the final form of your product.

Accepted Answer

The answer of What should entrepreneurs do in communicating about...

Quiz 12: Bootstrapping for Resources

What is the characteristic of the lending model of crowdfunders?

Of the following, what best describes the value of crowdfunding?

What should be done by an entrepreneur who expects a successful crowdfunding campaign?

What is the characteristic of the investor model of crowdfunders?

Which of the following is NOT one of the basic rules of Kickstarter?

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:

According to the textbook, which is the most established crowdfunding site?

What should be done by an entrepreneur who expects a successful crowdfunding campaign?

Why is it important to talk to others who have used crowdfunding?

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

What should be done with the product concept in order to conduct a successful campaign?

What unique way did international singer Verity Price use to engage her audience?

One of the problems with the Coolest Cooler was that:

Which of the following is NOT a crowdfunding mistake?

Gerry is working on getting the description of his product down to two sentences.He also tries out his pitch with people who have not heard of his product before.What element of conducting a campaign is Gerry observing?

What is the characteristic of the reward model of crowdfunders?

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?

Crowdfunding that gives backers the opportunity to become shareholders in a company is called ____________.

The site Crowdcube is unique for which of the following reasons?

What should entrepreneurs do in communicating about their product during a crowdfunding campaign?