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Capital for early stage businesses supplied by large numbers of individuals making relatively small individual investments, often facilitated online.

This can be an alternative to bank funding.

The motivations and rewards for entering into crowdfunding can range from:

  • Essentially donations for a good cause, or a cause the donors are motivated to support (for non-financial reasons).
An example could be to keep local shops open, that would otherwise close down as not being commercially viable.
The 'rewards' are essentially add-on motivation.

  • Funding motivated by the financial interests of the funders.
This will normally be in the form of ordinary shares (equity).

See also