Which of the following statements about Crowdfunding is/are correct?

1. Crowdfunding is solicitation of funds (small amount) from multiple investors through a web-based platform or social networking site for a specific project.

2. Small and Medium Enterprises (SMEs) are able to raise funds at lower cost of capital without undergoing rigorous procedures.

Statement 1 is correct: Crowdfunding is fundamentally a method of raising capital by soliciting small individual contributions from a large number of people ("the crowd"). This process is almost exclusively driven by online web-based platforms or social media networks, where a specific project, startup idea, or social cause is pitched to the public.

Statement 2 is correct: Traditional financing (like venture capital or an Initial Public Offering) involves highly rigorous, time-consuming, and expensive legal and regulatory compliance procedures. Crowdfunding allows Small and Medium Enterprises (SMEs) to bypass many of these traditional intermediaries. This can lower the overall cost of capital acquisition and streamline the fundraising process, making it highly accessible for smaller businesses.