Crowdfunding (also known as crowd financing or crowd sourced capital) is where a number of people each invest, lend or contribute small amounts of money to your business or idea. This money is combined to help you reach your funding goal. Each individual that backs your idea will usually receive rewards or financial gain in return.
Crowdfunding usually takes place through a website. The platform will manage any online payments and may often offer services such video hosting, social networking and enabling contact with contributors.
This guide explains the different types of crowdfunding, examines the benefits and risks, and gives advice on whether this type of finance could be right for your business.
It also highlights things to consider when choosing a crowdfunding website, and where to find more information and support.