Crowdfunding is the funding of ventures or projects by raising money from a large number of people – the crowd. It is a relatively new phenomenon which takes advantage of digital technology to deliver financial services online. As such, crowdfunding is seen as a branch of the broader ‘fintech’ movement.
The three main types of crowdfunding are:
- Equity – buying a stake in a company
- Debt – lending money to a company or individual
- Donations – giving money to a particular charity or project, often in return for some form of reward