Crowdfunding, as the name suggests, is a method of business financing that relies on donations from interested individuals across the world, rather than traditional forms of equity and debt financing. Equity financing offers investors a stake in your business in return for their upfront investment and debt financing provides upfront capital in return for future interest payments. Crowdfunding, on the other hand, allows you to exchange your own services or personal gifts for early investment in your small business.
Instead of splitting control of your company with investors, or entering into long term contracts with traditional lenders, you may, through crowdfunding, garner investment capital by offering discounts on popular services, free merchandise, or something as simple as a handwritten card.
For those starting a business, crowdfunding provides a low-cost method of reaching out to investors, as well as a growing social media platform for brand profiles and promotion. Depending on the essentials of your business, one of several crowdfunding options may fit your needs.