There are four main types of Crowdfunding that you may hear about.
- Donation – Contributor receives nothing in return for their contribution. These are generally for causes or personal issues
- Reward – Contributor receives a product or service (reward or perk) in exchange for their contribution
- Equity – (Peer to Peer Lending) Crowd lends money to creator who pays back, generally with lower interest rate
- Debt – Creator sells a percentage of business which the contributor receives shares
- Royalty (not talked about much) – Contributor receives royalties when the creator earns profit