Types of Crowdfunding

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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