Crowd Funding is a platform where worthwhile causes and businesses can raise small amounts of money from a large number of individuals via the Internet. It is growing at an astonishing rate. It is estimated that there are about 2,000 Crowd Funding sites on the web with a turnover of $30 billion+. It consists of two principal variants.
Contributors are asked to fund a venture without being offered a share in the venture. It can be a simple donation towards a project; i.e. pure philanthropy. Or it can be in return for some sort of reward. For example $400,000 was raised on a Crowd Funding site from 5,770 individuals to make the movie Anomalisa; and the reward was simply an acknowledgement of their name on the credits. In other cases, the reward can be in kind, as for example the offer of a free software program in return for backing its development.
A notable donation Crowd Funding site is GoFundMe.com.
A notable reward Crowd Funding site is Kickstarter.com.
Contributors receive a stake (share, convertible note, etc.) in the venture proportionate to the contribution and thereby participate in the potential financial success of the venture based on the level of financial support. This sort of Crowd Funding is particularly suited to small start-up businesses.
A notable equity Crowd Funding site is CrowdFunder.com.