What is Crowdfunding?

Crowdfunding is an effort to raise money through a network of people, typically through a combination of social networks and fundraising platforms on the Internet. Many organizations, especially start-ups, turn to online tools such as Kickstarter to finance new projects and products. Crowdfunding has been known to support many different activities, from helping communities recover from disasters to bringing an innovative prototype through its the last phase of development. On these platforms, the pool of potential donors and investors is opened up, giving the public an opportunity to fund the process. Sometimes the citizen investors are promised something in return for the support, such as a free version of product, branded swag, or even personal letter of gratitude. One of the appeals of crowdfunding is that it is often completely transparent -- the organizations have a set amount of money they need and people can see in real-time how much left is needed, and watch the financial gap lessen as they invest.