ITPEC IP April 2023 Question 92
ITPEC IP April 2023 — Question 92 of 100
Receiving a share of business profits as dividends makes this investment-based crowdfunding. Funders supply capital in return for an investment interest, and their compensation depends on the business's performance rather than a fixed repayment, a donated purpose, or delivery of a product.
Answer (d)
Why not others:
- (a) Loan-based funding is repaid as debt, normally with agreed interest
- (b) Donation-based funding generally provides no financial return to contributors
- (c) Purchase-based funding rewards supporters with a product, service, or other non-investment benefit
Key rule: Dividends or gains linked to ownership indicate investment; principal plus interest indicates a loan; a product indicates purchase-based funding.
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