Crowd Fund
What Is Crowdfunding? The Clear and Simple Answer
Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals. The core principle behind the crowdfunding definition is that you can help a friend or help an entire community. You can do everything from pay for your own surgery to fulfill a student’s dream of attending college—and so much more.
If you’ve ever found yourself wondering, “What is crowdfunding?” “What does crowdfunding mean?” or, “What are the benefits of crowdfunding?” then keep reading. We’ll answer your questions about crowdfunding and give you top tips on how to bring in donations.
Crowdfunding harnesses the power of social networks and the internet to give people the means to raise funds, help others overcome hardship, and meet aspirational goals. The core principle behind the crowdfunding definition is that you can help a friend or help an entire community. You can do everything from pay for your own surgery to fulfill a student’s dream of attending college—and so much more.
If you’ve ever found yourself wondering, “What is crowdfunding?” “What does crowdfunding mean?” or, “What are the benefits of crowdfunding?” then keep reading. We’ll answer your questions about crowdfunding and give you top tips on how to bring in donations.
The rise of crowdfunding
Four of the most common questions about crowdfunding
1. How do I know if crowdfunding is right for me?
While most people think crowdfunding services are only for individuals who need emergency financial assistance, businesses looking to fund a new project or raise capital can also fundraise online. Entrepreneurs can even use crowdfunding to finance projects or a new creative idea.
While most people think crowdfunding services are only for individuals who need emergency financial assistance, businesses looking to fund a new project or raise capital can also fundraise online. Entrepreneurs can even use crowdfunding to finance projects or a new creative idea.
2. What are the different types of crowdfunding?
Donation-based crowdfunding: This type of crowdfunding is one of the most common when looking up “what is a crowdfunding campaign.” In donation-based crowdfunding, people search for and support a cause by donating to it without receiving anything in return. The person running the fundraiser isn’t obligated to pay back donors or give them anything else in return for their contributions. GoFundMe is one of the major crowdfunding sites that uses donation-based crowdfunding.
Equity-based crowdfunding: In equity-based fundraising, the fundraiser organizer accepts money from people looking to invest, typically to help launch a business. In return, investors will receive a small piece of equity in the business or company.
Rewards-based: Through rewards-based crowdfunding on platforms like Indiegogo and Kickstarter, the organizer of the fundraiser provides a reward or products to donors, usually a service or physical item, in exchange for a contribution.
Note: GoFundMe only allows donation-based crowdfunding.
Donation-based crowdfunding: This type of crowdfunding is one of the most common when looking up “what is a crowdfunding campaign.” In donation-based crowdfunding, people search for and support a cause by donating to it without receiving anything in return. The person running the fundraiser isn’t obligated to pay back donors or give them anything else in return for their contributions. GoFundMe is one of the major crowdfunding sites that uses donation-based crowdfunding.
Equity-based crowdfunding: In equity-based fundraising, the fundraiser organizer accepts money from people looking to invest, typically to help launch a business. In return, investors will receive a small piece of equity in the business or company.
Rewards-based: Through rewards-based crowdfunding on platforms like Indiegogo and Kickstarter, the organizer of the fundraiser provides a reward or products to donors, usually a service or physical item, in exchange for a contribution.
Note: GoFundMe only allows donation-based crowdfunding.
3. Is it okay to raise money for myself?
Absolutely. Thousands of people start online fundraisers every day to raise money for themselves. It’s understandable that you might be nervous about asking for money. But it’s important to remember that nearly everyone has experienced financial hardship at one point or another. You might be surprised by the number of people who want to support you when you need it most.
Absolutely. Thousands of people start online fundraisers every day to raise money for themselves. It’s understandable that you might be nervous about asking for money. But it’s important to remember that nearly everyone has experienced financial hardship at one point or another. You might be surprised by the number of people who want to support you when you need it most.
4. What is the best way to get more donations?
While there’s no magic formula for receiving donations, there are definitely steps you can take to set yourself up for success. The most important thing you can do is create a compelling fundraiser and build a community that empathizes with your cause. Investing the time into your fundraiser story will inspire your network of friends and family to take action. For specific tips on how you can create an engaging fundraiser and share it far and wide, read on.
While there’s no magic formula for receiving donations, there are definitely steps you can take to set yourself up for success. The most important thing you can do is create a compelling fundraiser and build a community that empathizes with your cause. Investing the time into your fundraiser story will inspire your network of friends and family to take action. For specific tips on how you can create an engaging fundraiser and share it far and wide, read on.