A list of crowdfunding terms defined for you

  1. CrowdfundingCrowdfunding India is raising relatively smaller amount of funds from a large number of people online for nonprofits, medical, personal or creative needs.
  2. Crowdfunding platform – This is a crowdfunding website which enables people, nonprofits, or companies looking for money. These platforms list different project and raise and process the funds between the donors, giving the money and the campaigner who receive it.
  3. Crowdsourcing – Crowdsourcing is a method through which a project, task or a complication is resolved through a team of unauthenticated and geographically scattered participants. It is a linked process evaluation or problem-solving technique that involves help from a network of people or a crowd. The network is generally connected through the internet or via specific websites. The largest online crowdsourcing platform is from India.
  4. Donation crowdfunding – In donation-based crowdfunding, there is no financial return for the investors or the contributors. Donors have a personal or social motivation for putting their money in and anticipate nothing back, except to feel good about helping the project. People plough money in simply because they believe in the cause. Medical bills, disaster-relief, non-profits, and charities are some common examples of donation-based crowdfunding.
  5. Equity – The ownership of a piece of a company as an investment is called equity.
  6. Equity crowdfunding – It permits real investment in private companies. In simple words, equity-based crowdfunding allows investors to become part-owners of a company by trading money for equity shares. As this type of crowdfunding involves investment into a commercial enterprise, it has often been a subject to security and financial regulations.
  7. Peer to peer crowdfunding – Also known as debt-based crowdfunding or lend to save, this is a form of borrowing or lending between individual or “peers” that does not involve a traditional financial institution such as a bank. The returns are financial but the investors also get the benefit of having contributed to the success of an idea they believe in. Borrowers create a campaign to achieve their financial needs and the investors contribute towards the goal for an interest.
  8. Rewards – Rewards are something that is given to the donors in exchange for their money while crowdfunding, it can be anything from the first tun of an actual product, a small souvenir related to the project being funded, a sticker or a small acknowledgment note.
  9. Reward-based crowdfunding – The investors investing in this type of crowdfunding expect some reward in return which is linked to the project. This is a non-equity way of crowdfunding. In some projects, rewards are offered in various forms that the donor can choose from.
  10. Startups – A young company that is just starting to grow. They are generally small and financed and functioned by a bunch of founders or a single individual in the beginning. They offer a unique product or service, that is not being provided anywhere else in the market or are being offered in an unsatisfactory manner.
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