crowdfund

Crowdfunding, or crowdfund in its verb form, is the practice of funding a project or venture by collecting small contributions from a large number of people, typically via the internet. A crowdfund campaign is a structured effort to raise a target amount within a set time, often through an online platform that hosts the pitch and handles payments. Crowdfunding has been used for creative works, startups, community projects, and charitable causes.

Funding models vary. Rewards-based crowdfunding offers non-financial perks to backers; equity crowdfunding provides ownership shares; debt crowdfunding involves loans to be repaid with interest; donation-based crowdfunding accepts contributions with no expected financial return. Platforms such as Kickstarter and Indiegogo popularized rewards-based crowdfunding, while regulatory-approved equity platforms exist in many jurisdictions.

Campaign mechanics include setting a funding goal and a deadline, presenting a pitch with images or videos, and offering incentives. Pledges are collected by the platform; in all-or-nothing models, funds are released only if the goal is reached, otherwise backers are not charged. Flexible models may release funds regardless of outcome.

Advantages include rapid access to capital, market validation, and community building. Risks involve failure to deliver promised rewards, project delays, unclear use of funds, fraud, and regulatory compliance issues. Backers should assess feasibility, timelines, and the track record of project creators.

History and impact: Crowdfunding emerged in the 2000s with the rise of internet platforms, growing into a major financing channel for creative, entrepreneurial, and social initiatives worldwide. While it lowers traditional barriers to funding, it also requires safeguards for participants and transparent disclosure by campaigns.