Home / Blog
Crowdfunding is a financing method that involves funding a project with relatively modest contributions from a large group of individuals, rather than seeking substantial sums from a small number of investors. The funding campaign and transactions are typically conducted online through dedicated crowdfunding sites, often in conjunction with social networking sites.
Types of Crowdfunding
1. Investment-based crowdfunding:
You invest in a business and receive a stake in return (normally shares).
2. Loan-based crowdfunding:
You lend money to individuals or companies in return for a set interest rate. It’s also called peer- to-peer or peer-to-business lending (P2P or P2B). You can read more about loan-based crowdfunding in our guide to Peer to peer lending.
3. Donation-based crowdfunding:
You donate to a person or a charity (you may be promised something in return).
4. Reward-based crowdfunding:
You give money in return for a reward linked to the project or cause you’re supporting.
Crowdfunding Websites in India
- By Drumil Shere