What are the different types of crowdfunding?

I've heard that there are different categories for crowdfunding. What are they?

Question asked on 12/10/18 @ 4:29pm, edited on 01/05/19 @ 3:42pm

can you elaborate on your question? - Alex Feldman February 21, 2019
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Rewards crowdfunding offers some type of tangible reward, like a pre-sale of the object that the campaign is raising for or an unrelated object or a service, like a piece of art or a massage. Rewards are offered in a tiered system, so the backer will get a different reward if she donates $5 than if she donates, say, $100. In a good campaign, the rewards will get “better” as the donated amount.


Examples of popular reward crowdfunding platforms include: Kickstarter, IndieGoGo, and RocketHub.


Donation crowdfunding doesn’t offer any kind of reward to the backer — these are people who are giving to a worthy cause out of the goodness of their hearts. They may get a tax receipt, but that’s really it.


Examples of popular donation crowdfunding platforms include: GoFundMe, Fundly, and DonorsChoose.

Response posted on 12/10/18 @ 4:30pm
 

Equity crowdfunding, as defined by Wikipedia, is a mechanism that enables broad groups of investors to fund startup companies and small businesses in return for equity.

I prefer the term Investment Crowdfunding because not all investments come in the form of equity (i.e. owning stock in a company). For example, a company could crowdfund an investment that gets repaid like a loan. Whether it's debt or equity, Investment Crowdfunding offers investors some kind of financial return for their initial financial contribution to an business.

Examples of investment crowdfunding platforms:  Milk Money, SeedInvest, WeFunder

Response posted on 03/05/19 @ 10:35am
 
This is really insightful, Janice.  Thank you sharing your knowledge in this area!
Response posted on 03/06/19 @ 10:04am
 
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