Crowdfunding is a form of financing by a crowd that usually takes place online.
The aim of a crowdfunding campaign is to (partially) finance a project, so it can be implemented. Such a campaign always has a time limit and usually runs for an average of 4 weeks.
There are several forms of crowdfunding:
- Reward based – crowdfunding as a market test and pre-sale, funders receive material or immaterial consideration
- Equity based – microinvestments of many individuals, funders receive performance-based return
- Donation based – collecting donations via the crowd, usually without consideration
- Lending based – crowd as lender, altenative to bank loans, lenders receive interest
Crowdfunding has several advantages: Besides the financing as such it’s a good tool for a first target group analysis, it offers the possibility to get direct feedback and to market the products and at best it generates the first customers.
Find more information on crowdfunding on the following platforms: