Which option represents a common source of funding for startups besides venture capital and angel investors?

Study for the WGU BUS2070 D080 Managing in a Global Business Environment Exam. Prepare using flashcards and multiple-choice questions with hints and explanations. Enhance your readiness for a global business environment.

Crowdfunding is a common source of funding for startups that has gained popularity in recent years as an alternative to traditional financing methods such as venture capital or angel investors. With crowdfunding, entrepreneurs can raise small amounts of money from a large number of people, typically through online platforms. This approach allows startups to tap into a broad base of potential investors, often leveraging social media and community support to build interest and funding for their projects.

Additionally, crowdfunding enables startups to validate their business idea before fully launching the product or service. It also provides a way for the general public to engage and invest in innovative concepts, creating a sense of community around the brand. Crowdfunding is especially beneficial for those startups that might struggle to secure funding from conventional sources due to a lack of credit history or established relationships with investors.

While the other options, such as bonds, corporate financing, and bank loans, are legitimate sources of funding, they often come with stricter requirements, higher risks, or less availability for early-stage startups. Consequently, these alternatives may not be as accessible or suitable for new businesses compared to the more inclusive nature of crowdfunding.

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