Crowdfunding – additional information
Crowdfunding is a process of raising money for various projects, which, due to lack of other financing sources might have no chance for success. A big advantage of crowdfunding is that anyone can support a given project and people can contribute the amount of money of their choice. The fund seekers publish the idea of their project on the selected online crowdfunding platform. Usually send the information also to their private circle (family, friends) as well to the public (for example using social media).
Among the various types of crowdfunding, the main ones are reward, donation, debt and equity crowdfunding. Donation crowdfunding relies on the principle that people frequently donate money simply because they believe in the cause and expect nothing in return except for feeling good for supporting the project. In case of reward donation, the fund-donors get a present as an acknowledgement of their investment. Debt crowdfunding takes place when investors get their money back with interest. In equity crowdfunding, investors become a part of the project and earn money if it grows into a successful undertaking.
The worldwide value of funding provided through crowdfunding platforms observed a dynamic increase in the years 2009-2012.