Crowdfunding

Crowdfunding is a fundraising method where a project, idea, or business collects small monetary contributions from a large number of individuals, usually through an online platform. Unlike traditional fundraising, crowdfunding leverages online communities and social connections, allowing project creators to reach people worldwide and directly engage potential contributors.

Initially popularized by platforms such as Kickstarter and Indiegogo, crowdfunding has become increasingly important for entrepreneurs, startups, artists, and even nonprofits who wish to launch initiatives without relying solely on traditional financing sources like banks or venture capitalists.

There are different types of crowdfunding approaches:

• Donation-based crowdfunding – Funds are raised purely through donations, often for charitable causes.
• Reward-based crowdfunding – Backers contribute funds in exchange for rewards or early access to products.
• Equity-based crowdfunding – Investors receive a small stake or shares in the company in exchange for their financial support.
• Debt-based crowdfunding (crowdlending) – Fundraising through loans which must later be repaid with interest.

Crowdfunding allows ordinary people to support innovative ideas while enabling entrepreneurs and creators to access resources they might not otherwise attain.

For more details on how crowdfunding works, check out Kickstarter's guide or Indiegogo's introduction.