Crowdfunding

Crowdfunding, also known as micro-patronage, is a way of raising funds for projects, initiatives or causes through the financial contribution of a large group of people, usually online through specialized platforms.

Rather than relying solely on a single financial entity or investor, crowdfunding relies on the collaboration of a diverse and global crowd of individuals who contribute small amounts of money to support a cause, a creative project, a start-up company or a charitable cause. This phenomenon takes place on online platforms, which act as intermediaries between project creators and potential backers. These platforms provide a space where creators can present their ideas in detail, describing their purpose, objectives, benefits and rewards for contributors. Backers, for their part, have the opportunity to evaluate a wide variety of projects and decide which ones they wish to invest in, based on their personal interests and values.

Crowdfunding encompasses an array of strategies, each characterized by its unique dynamics. Take reward crowdfunding, for instance, where contributors receive incentives that vary based on their contribution level, which might encompass exclusive products, services, or experiences linked to the project. On the flip side, in loan crowdfunding, backers transition into lenders and subsequently receive reimbursement of their investment alongside interest payments over a predefined period.

This phenomenon has broadened the accessibility of funding, affording individuals and collectives with inventive concepts, creative endeavors, or social initiatives the means to garner the necessary backing for transforming their visions into tangible realities. Moreover, crowdfunding extends beyond geographical confines and the conventional confines of funding, forging connections among individuals from diverse corners of the world who unite around shared interests in endorsing ideas and causes they hold in high regard.