What is Crowdfunding? Is it for You?

6/02/2015

Crowdfunding has increasingly become a hot topic in the last few years. But you might be asking yourself, what is it? Is it right for me?


Crowdfunding is the tool, practice, and process used to fund an initiative by raising financial contributions from a group of individuals online.[1] More formally, crowdfunding serves as an alternative source of capital to support a wide range of ideas and ventures. An entity or individual raising funds through crowdfunding typically seeks small individual contributions from a large number of people. A crowdfunding campaign generally has a specified target amount for funds to be raised, or goal, and an identified use of those funds. Individuals interested in the crowdfunding campaign–members of the crowd–may share information about the project, cause, idea, or business with each other and use the information to decide whether or not to fund the campaign based on the collective wisdom of the crowd.[2] Put more simply, crowdfunding uses the power of the Internet and social media to raise small amounts of money from lots of different people.[3]
Whether you’re supporting a non-profit through a donation, pre-ordering a product by backing a project and receiving a perk in exchange, being a funder of a loan for a peer-to-peer based lending platform, or investing in a company by getting equity in exchange of your investments, crowdfunding enables everyone--both funders and funding seekers--to mobilize financial resources to fund the projects that they most care about. You can learn more about crowdfunding on our soon to launch book, Impact With Wings: Stories to Inspire and Mobilize Women Investors and Entrepreneurs.


Have you ever invested, funded or donated on a crowdfunding platform? If so, share with us which platforms and projects are your favorites!




[1] Wikipedia Crowdfunding definition http://en.wikipedia.org/wiki/Crowd_funding
[2] Securities and Exchange Commission http://www.sec.gov/rules/proposed/2013/33-9470.pdf

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