Crowdfunding is a method of collective funding that has been made available to a wider population thanks to the development of the Internet and online payment processing.
Crowdfunding is used to financially support a wide range of funding campaigns and individuals who require money to start certain ventures, including software developers, business startups and even scientific research projects or inventions.
A crowdfunding project relies on a large pool of individual investors who are allowed to contribute until an initial investment goal is met.
There has been a lot of work done recently to improve the efficiency and availability of online crowdfunding solutions, with sites like Kickstarter leading the way and popularizing this new age fundraising method.
Crowdfunding initiatives usually don’t provide the individual investors any dividends due to restrictive investment laws, but there are already legislations in the works that aim to change that.
Besides the financial gains, crowdfunding also offers many additional benefits, such increasing the exposure of commercial products, measuring interest in a particular invention or fleshing out new business ideas with useful feedback.
Crowdfunding campaigns are typically started by people who want to avoid outside creative oversight of their projects that would come with being financed by a single large investor.
For ideas that are usually too much of a risk to large investors, crowdfunding can become the only way of securing the required financial backing and entering a full development stage.
Actor and director Zach Braff of Scrubs fame recently launched a highly successful crowdfunding campaign on Kickstarter, aimed to finance his upcoming independent film Wish I Was Here, as well as offering access to a live video diary and other bonuses to all contributors.
The opportunities presented for both fundraising and small business capital raises through crowdfunding are likely to make this a game changer for individuals, not for profits and small business. We look forward to continuing to follow the crowdfunding industry over the next few years as this industry matures. Many state governments, with the help of lawyer-lobbyists, are embracing crowdfunding as a supplement to local taxing for municipal projects.

Crowdfunding Sites