Image for article: Crowdfunding

Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people. Crowdfunding is a form of crowdsourcing and of alternative finance. In 2015, it was estimated that worldwide over US$34 billion was raised this way.

Image for article: Primary types of crowdfunding

The Crowdfunding Centre's May 2014 report identified two primary types of crowdfunding:

  1.  Rewards crowdfunding: entrepreneurs presell a product or service to launch a business concept without incurring debt or sacrificing equity/shares.
  2. Equity crowdfunding: the backer receives shares of a company, usually in its early stages, in exchange for the money pledged