Crowdfunding comes in many shapes and sizes, but all forms of crowdfunding are essentially the same at their core: a crowd of individuals pool their money together to support something that they are interested in. Each form can be put into four basic categories…
Individuals invest their money in exchange for small pieces of ownership in the company raising the money. Anyone can invest in companies seeking crowdfunding, not just accredited investors.
Individuals spend their money for some sort of reward. Rewards range from thank you emails to a brand new product.
Individuals loan their money to individuals or businesses in need of cash. These loans are usually a few thousand dollars and provide a favorable alternative to bank loans due to their competitive interest rates.
Individuals donate their money in exchange for a good feeling about helping out someone or something that they are passionate about. Giving back and the overall social benefit from donating drives these individuals to help worthy causes.
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