crowdfunding

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This is a relatively new type of person-to-persons financing based on donations, pre-orders, a reward system or small equity investment through online platforms.

People who have projects, business ideas or simply need (monetary) help in getting an initiative started or calling attention to an important issue (ex. the ice-bucket challenge to help those with ALS) usually create a video to explain what they need and why, put that video on a crowdfunding online platform and others who see their presentation and like their idea will help the creator by providing funding in the form of donations.

The donations are brought together after the pre-establish funding period has expired. In exchange for their donations, people can receive keep sakes, discounts, recognition, certifications (for tax purposes), a small share of capital in the start-up company or just a good feeling for having helped someone out.

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