Crowdfunding is a method of funding a project or organisation by pooling the money of individual investors. It can provide a number of benefits beyond the financial including marketing, audience engagement and feedback. Crowdfunding allows good companies which don't fit the pattern required by conventional financiers, to break through and attract cash. There are a number of types of crowdfunding but the 3 main categories are:
- Reward or donation based crowdfunding – these are not investments
- Loan crowdfunding (often referred to as peer-to-peer loans or debt crowdfunding)
- Equity crowdfunding
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