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A Short Comparison between CrowdFunding and CrowdSourcing - CrowdFundingPlanning.com - CFP

posted Apr 3, 2013, 2:20 PM by Andrew Manzo   [ updated Apr 5, 2013, 4:17 PM by David Khorram ]
    Also referred to as “crowdsourcing,” crowdfunding is the concept of raising startup money and capital through a series of contributions from supporters, customers, and business and personal networks rather than traditional bank loans and investors. According to Crowdfunding.com, it is: “Financial contributions from online investors, sponsors or donors to fund for-profit or non-profit initiatives or enterprises. Crowdfunding is an approach to raising capital for new projects and businesses by soliciting contributions from a large number of stakeholders.”

    Signed by President Barack Obama in April 2012, The JOBS Act – Jump-start Our Business Startups – allows companies to raise up to $1 million a year via crowdfunding without the normal registration requirement for soliciting investors.

The rise of crowdfunding

  • Almost $1.5 billion was raised by crowdfunding platforms worldwide in 2011.
  • North America was the largest market for fundraising.
  • More than 1 million successful campaigns were run by crowdfunding platforms in 2011.
  • The majority of these campaigns were in the donation-based category but equity-based campaigns were, on average, much larger in size in terms of funds raised.


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