ABSTRACT
The emergence of technology has altered the business financing landscape for good. With this development is the emergence of a new and alternative source of capital generation known as crowdfunding. Crowdfunding is a relatively new funding method in which people from all over the world contribute little amounts of money to a project they are passionate about. Money is raised either directly or through online platforms. The exact reasons for the rise of crowdfunding are unknown. However, two distinct driving factors: the availability of online technology, and the “credit crunch” occasioned by the global financial crisis of 2007–2008 are mentioned. The purpose of this chapter is to examine this phenomenon from several angles. We explore in this chapter a definition and history of crowdfunding and discuss types of crowdfunding, including donations-based crowdfunding, equity-based crowdfunding, peer-to-peer (P2P) lending, product pre-sale crowdfunding, rewards-based crowdfunding. We also discuss the characteristics required of a crowdfunding entrepreneur, the requirements of crowdfunding platforms and best tips to increase the chances of funding.
