Business Models
Crowdfunding
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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.
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). Cross-Tradition Connections
Associated With
Crowdfunding lowers the capital-raising barrier entrepreneurship traditionally required from banks or venture investors, letting founders fund ventures directly from prospective backers.
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.
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