Crowdfunding is a financing model in which a project or venture raises money from a large number of people, typically in small amounts over the internet, connecting a project initiator, many individual backers and a moderating online platform. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/
Facts
Core MechanismA project initiator proposes an idea to a large number of potential backers through a platform; reward-based crowdfunding pre-sells the product without incurring debt or sacrificing equity, while equity crowdfunding exchanges funding for company shares. 1 Origin YearArtistShare, launched in 2001, is generally cited as the first dedicated online crowdfunding platform, followed by Kiva (2005), Indiegogo (2008) and Kickstarter (2009). Connections
Associated With
Crowdsourcing and crowdfunding are sibling coinages from the same internet-enabled crowd-participation wave: crowdsourcing gathers ideas, content or labor from a dispersed public, crowdfunding gathers money from one.
Crowdfunding lowers the capital-raising barrier entrepreneurship traditionally required from banks or venture investors, letting founders fund ventures directly from prospective backers.
Source Wikipedia, Crowdfunding
Pretail, Business Models Pretail pre-order commerce is closely derived from the crowdfunding model.
Sources
1. Wikipedia, Crowdfunding
Wikipedialead sectionQuote, lead section
Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet.
Frequently Asked Questions
Who is involved in a crowdfunding campaign?
A project initiator, many small backers, and a moderating online platform.
Crowdfunding connects a project initiator, many individual backers and a moderating online platform, with a large number of people typically contributing small amounts over the internet toward the total raised.
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