Crowdfunding is a way to raise money by asking for small amounts of money from a large number of people for a project or business. This is fairly new territory and the laws behind it are constantly changing. It is another way for startup businesses to raise money for their business but caution should be taken to assure this is the best strategy for your business.
There are 4 types of crowdfunding:
- Reward – the business owner provides various rewards for those who are willing to help fund the business.
- Debt – the owner takes on a loan which is funded by various investors at varying levels.
- Equity – the owner gives a percentage of their company to investors.
- Donation – the campaign is used to raise funds without additional incentive for the donors.
Below is a list of Crowdfunding platforms that allow various crowdfunding options for early stage businesses.