Crowdfunding consists of collective cooperation to get money or other resources, and it’s typically used thru internet to fund efforts and initiatives of other persons or organizations of any public or private and nonprofit. This type of financing can be used for many purposes: artists seeking support from fans to finance the production of their work, or startups and small businesses to fund their growth cost, or even public institution searching funds for their public items.
It has been established across countries that there are five types of crowdfunding that can be divided into:
- Donations usually for social or cultural
- Loans peer-to-peer (from person to person)
- Micro-investment associated with a share exchange or equity capital increase.
- Activities or pre-paid products: advancing the payment of the use of a product or service for a specific period of time, pre-paid products that are not yet available in the market