Types of Crowdfunding

There are several types of crowdfunding campaigns: (charity, debt, equity, and donation and rewards to name a few). The Startup Hour™ will offer rewards and equity campaigns.

Ask a Question

Your Name (required)

Your Email (required)

Your Message (Optional)

What is Crowdfunding?

Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. Crowdfunding makes use of the easy accessibility of vast networks of friends, family and colleagues through social media websites like Facebook, Twitter and LinkedIn to get the word out about a new business and attract investors. Crowdfunding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists.

What is donation based crowdfunding?

Donation based crowdfunding is for social causes and charitable causes. It is a pure donation. This works best for campaigns that the audience donating has a special tie to. Examples could be natural disasters, health complications, animal shelters, and homeless shelter funding.

What is debt based crowdfunding?

Debt-based crowdfunding is also known as peer to peer lending or a loan. It is an investment into a business or project that offers a set return on investment over a predetermined time frame.

What is rewards based crowdfunding?

Rewards based crowdfunding can also be called premium based crowdfunding. It is best used for projects or charitable endeavors. It is a small token of appreciation given to those that contribute monetarily to these projects or charities. The token can be in the form of a t-shirt, the product, posters, hand written note, and the list goes on.

What is equity crowdfunding?

Equity crowdfunding is where investors are issued ownership into a small business or project after exchanging capital to help grow or start their business. They are exchanging capital for ownership in the hopes of receiving a return in their investment.