About Crowd Funding

What is crowdfunding?

Crowd funding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Crowd funding is a form of crowd sourcing and alternative finance. Although similar concepts can also be executed through mail-order subscriptions, benefit events, and other methods, the term crowd funding refers to Internet-mediated registries.

About crowdfunding?

In the past, when someone wanted to fund something be it a project, a company, or anything that required capital to start there were a few ways to raise money. They could take on debt from a loan. They could raise money from friends, family members, and angel or VC investors. They could even take the ‘bootstrapping’ route and scrounge up as much money as possible to fund the project themselves. In the late 2000s, a fourth option became viable for those trying to get something off the ground: crowd funding.

Crowd funding has become most valued easy way to raise money from a large number of people. Large groups of people pool together small individual investments to provide the capital needed to get a company or project live.

This modern crowd funding model is generally based on three entities;-

  • Project initiator who proposes the idea
  • Individuals or groups who support the idea
  • Mediating organization (‘platform’ or ‘website’ or ‘app’)