Statement 1 is Correct: According to the Securities and Exchange Board of India (SEBI), Crowdfunding is officially defined as the solicitation of funds (usually small amounts) from multiple investors through a web-based platform or social networking site for a specific project, business venture, or social cause. It democratizes capital raising by bypassing traditional financial intermediaries and directly connecting entrepreneurs with a large pool of individual backers online.

Statement 2 is Correct: Crowdfunding provides an alternative financing route for Small and Medium Enterprises (SMEs) and startups. It allows them to raise funds at a lower cost of capital compared to high-interest traditional loans or giving up massive equity stakes to institutional investors. Furthermore, it enables them to secure funding without undergoing the rigorous, time-consuming procedures, strict collateral requirements, and heavy compliance associated with traditional bank lending or formal stock exchange listings.

Since both statements are correct, the correct option is C.