ABSTRACT
Crowdfunding is equity financing raised on the Internet. Producers can obtain funding from potential consumers before incurring large costs, giving them the opportunity to carry out self-made production. Also, if the crowdfunding receives a cold welcome, producers should think twice before starting production. This saves investment cost compared with serious reflection after failure. Crowdfunding is not only a source of funds, but also a platform to evaluate product design and market prospects. In addition, it helps producers get rid of constraints frequently imposed by large funders. For consumers, they can contact the producer prior to final production to obtain the latest products. They can choose the share of their involvement according to their income level and judgment of the product’s value. Compared with a fixed investment share, multi-level choices of investment scale improve consumer utility.
