Crowdfunding: What is it?

An Introduction to Crowdfunding: What It Is and How It Works

Crowdfunding is a method where a large number of people provide money or other resources for a project, idea, or initiative through the internet. Typically, a crowdfunding campaign is conducted on specialized platforms like Kickstarter, Indiegogo, or GoFundMe. Crowdfunding has become one of the most popular and effective strategies to finance projects, bring ideas to life, and support charitable initiatives. There are different types of crowdfunding, each offering various models and approaches to gain community support.

In this guide, we will cover topics such as:

Introduction to Crowdfunding: What It Is and How It Works
The Different Types of Crowdfunding and Their Features
An Overview of the Most Popular Crowdfunding Platforms
Tips and Best Practices for a Successful Crowdfunding Campaign
Legal Aspects and Risks of Crowdfunding: What You Need to Know
How to Set Realistic Funding Goals for a Crowdfunding Campaign
The Role of Marketing and Promotion in Boosting a Crowdfunding Campaign
Communicating with Supporters: How to Maintain an Engaged Community During Your Campaign
Pros and Cons of Crowdfunding Compared to Traditional Financing Methods
Handling Challenges and Failures: Tips for a Successful Campaign
Tax Implications of a Successful Crowdfunding Campaign: What You Need to Consider
Choosing the Right Rewards and Incentives for Supporters: Strategies for Success
Finding Potential Backers: How to Generate Interest in Your Crowdfunding Campaign
What Happens If the Funding Goal Is Not Met? Analyzing Possible Scenarios
Measuring Success in Crowdfunding: Key Metrics and How to Interpret Them

Types of Crowdfunding:

Reward-based Crowdfunding: Reward-based crowdfunding is one of the most common forms where supporters receive rewards or incentives for their financial backing of a project. These rewards can be in the form of physical products, services, or unique experiences related to the project. For instance, an artist might fund a new album and offer supporters exclusive concert invitations, signed CDs, or limited-edition merchandise. These rewards aim to pique supporters’ interest and encourage them to back the project.
Equity-based Crowdfunding: Equity-based crowdfunding allows investors to purchase shares in a company that needs capital for growth or expansion. In return for their investment, investors receive a stake in the company and benefit from its success. This form of crowdfunding is often used by startups and small businesses that prefer to avoid traditional financing sources like bank loans or venture capital. For example, a tech startup might offer investors shares to fund the development of innovative new technology.
Loan-based Crowdfunding: Loan-based crowdfunding operates similarly to a traditional loan, where investors lend money to a project or company, which must be repaid, often with interest. The difference is that the funds are provided by a large number of investors rather than a single bank or lender. This form of crowdfunding can be used for businesses, real estate projects, or personal financial needs. An example is a small business borrowing money through a crowdfunding platform to finance its expansion.
Donation-based Crowdfunding: In donation-based crowdfunding, a project or organization raises funds from supporters without promising them any material return. This type of crowdfunding is frequently used for charitable causes, medical expenses, disaster relief, or creative projects. A well-known example is GoFundMe campaigns where individuals raise donations for medical treatments, emergency expenses, or humanitarian aid projects.

Overall, the various forms of crowdfunding provide a flexible and accessible way to gain financial support for a wide range of projects and initiatives. Each type of crowdfunding has its own pros and cons, and it is important to choose the right form of crowdfunding for the specific project or organization. Through crowdfunding, projects can be realized, businesses funded, and positive changes made in the world.

Crowdfunding enables founders, artists, non-profit organizations, and others to access funding opportunities that traditional financing sources might not offer. It also provides supporters with the chance to back projects and ideas they find meaningful or inspiring and be part of the creation story. Crowdfunding has revolutionized the way projects are financed, creating a democratic and accessible form of funding.

Here are some examples of individuals and groups for whom crowdfunding is particularly suitable:

Startups and Entrepreneurs: New companies and founders can use crowdfunding to raise capital for product development, business expansion, or market entry. Through crowdfunding, they can reach potential customers and investors without relying on traditional financing methods.
Creative Individuals and Artists: Artists, musicians, writers, filmmakers, and other creative people can use crowdfunding to finance their creative projects. They can get support for producing artworks, musical albums, books, films, or other creative works.
Non-Profit Organizations: Non-profits and charitable initiatives can use crowdfunding to raise funds for their programs, projects, and campaigns. They can receive support for causes like education, healthcare, environmental protection, or disaster relief.
Social Entrepreneurs: Social entrepreneurs and companies with a social or environmental mission can use crowdfunding to raise capital for their social projects and programs. They can receive support for social innovations, sustainable initiatives, or charitable enterprises.
Personal Financial Needs: Individuals can use crowdfunding to get financial support for personal projects, medical expenses, education costs, or emergencies. They can mobilize friends, family, and the online community to help them in difficult times.
Small Businesses: Small businesses and local shops can use crowdfunding to raise capital for expansion, renovation, or launching new products or services. They can engage their loyal customers and supporters to help grow their business.
Inventors and Innovators: Individuals developing new products, technologies, or innovations can use crowdfunding to cover development costs and market launch. They can get support for prototypes, product testing, and production costs.
Event and Festival Organizers: Organizers of events like music festivals, conferences, theater performances, or art exhibitions can use crowdfunding to cover event costs and pre-sell tickets. They can receive support for venues, artist fees, and advertising.
Athletes and Sports Enthusiasts: Athletes and sports enthusiasts can use crowdfunding to get financial support for their sports careers. They can get help for training equipment, travel costs to competitions or training camps, coaching fees, and competition entry fees.
Environmental Protection Organizations: Organizations dedicated to environmental protection and sustainability can use crowdfunding to raise financial support for their environmental projects. They can receive support for nature conservation areas, recycling programs, environmental education, or combating climate change.
Educational Institutions and Schools: Schools, universities, and educational organizations can use crowdfunding to raise financial support for educational projects, equipment, school events, or scholarship programs. They can receive support from parents, alumni, teachers, and the community.
Animal Shelters and Animal Protection Organizations: Animal shelters, animal rescue organizations, and animal protection groups can use crowdfunding to raise financial support for the care and treatment of animals. They can receive support for veterinary costs, food, shelters, and medical treatments.
Technology Startups: Startups in the fields of technology, software development, or hardware can use crowdfunding to raise financial support for the development and market launch of new products or services. They can receive support for prototypes, production costs, and marketing campaigns.
Cultural Projects and Initiatives: Cultural organizations, museums, theater groups, art galleries, and cultural event organizers can use crowdfunding to raise financial support for cultural projects, exhibitions, performances, or artistic programs. They can receive support from art lovers, culture enthusiasts, and the local community.

Overall, crowdfunding is suitable for individuals and groups with a creative idea, a social or charitable goal, or a financial need to achieve their goals. Crowdfunding offers a democratic and accessible way to receive financial support from a wide range of supporters and bring projects to life.

Crowdfunding is a versatile financing method suitable for a variety of projects and initiatives. However, there are certain areas where crowdfunding may be less suitable or pose particular challenges. Here are some examples:

Capital-Intensive Industries: Industries requiring large capital investments, such as heavy industry, infrastructure projects, or large-scale real estate projects, may struggle to meet their funding goals solely through crowdfunding. These projects often require significant investments and long-term financing agreements, which may not be feasible through crowdfunding alone.
Complex and Specialized Technologies: Projects developing complex or highly specialized technologies may have difficulty effectively communicating their message to potential supporters and convincing them of the project’s vision. Explaining technical concepts and demonstrating benefits to potential sponsors can be challenging.
Personal Financial Needs: While crowdfunding can be a way to get financial support for personal projects or emergencies, it can sometimes raise ethical concerns or privacy issues. Individuals seeking personal financial support should carefully consider how to communicate their needs publicly and ensure they comply with the crowdfunding platforms’ rules and guidelines.
Highly Specialized or Niche Topics: Projects or initiatives focusing on highly specialized or niche topics may struggle to reach a sufficiently large supporter base to meet their funding goals. Identifying and reaching the target audience can be challenging, and the potential reach may be limited.
Legal and Regulatory Restrictions: Some industries or projects may face legal or regulatory restrictions that make it difficult to use crowdfunding as a financing method. For example, certain financial products or investments may be subject to legal constraints that could limit the use of crowdfunding.

But as with everything, there are always exceptions. It is important to carefully assess the suitability of crowdfunding for a specific project or initiative and consider the potential challenges and limitations before deciding on this financing method.

The amount of money that can be raised through crowdfunding varies greatly and depends on a variety of factors, including the type of crowdfunding, the nature of the project, the target audience, the reach of the initiator, and the effectiveness of marketing and communication strategies. Here are some considerations:

Crowdfunding Type: The different types of crowdfunding (reward-based, equity-based, loan-based, donation-based) have different potentials for the amount of money raised. Equity-based crowdfunding can potentially bring in higher amounts since investors acquire shares in the company, while reward-based crowdfunding typically targets smaller amounts for rewards or incentives.
Project Type and Goal: The nature of the project and the associated funding goal play a crucial role in determining the amount of money raised. A small creative project may only need a few thousand dollars, while a large startup may require millions of dollars for development and expansion.
Target Audience and Reach: The target audience of the project and the reach of the project initiator are critical to the success of a crowdfunding campaign. The larger and more engaged the target audience and the more potential supporters the project reaches, the greater the potential for successful funding.
Effectiveness of Marketing and Communication Strategies: The way the project is presented and promoted can significantly impact how much money can be raised through crowdfunding. Effective marketing and communication strategies that highlight the project’s benefits and appeal to potential supporters can lead to higher revenues.

There are examples of crowdfunding campaigns that raise just a few thousand dollars and those that raise millions or more. Therefore, the amount that can be raised through crowdfunding is highly dependent on the specific project, the efforts of the initiator, and other variables.

Starting a crowdfunding campaign requires careful planning, preparation, and selecting the right platform. Here are the steps to start a successful crowdfunding campaign:

Develop Project Idea: Start with a clear project idea or initiative that appeals to potential supporters. Your idea should be unique, compelling, and well thought out.
Research and Planning: Conduct thorough research to identify the target audience you want to reach and understand the potential demand for your project. Create a detailed plan for your campaign, including the funding goal, rewards (for reward-based crowdfunding), marketing strategy, and timeline.
Choose the Right Crowdfunding Platform: There are various crowdfunding platforms, including Kickstarter, Indiegogo, GoFundMe, Startnext, and many others. Choose a platform that fits your project type and goals and has a large user base to maximize your reach.
Create Your Campaign Page: Set up an appealing and informative campaign page on the crowdfunding platform. Use compelling images, videos, and text to present your project idea, highlight the benefits for potential supporters, and build trust in your project.
Set a Funding Goal and Rewards: Determine the funding goal of your campaign based on the costs of your project and your financial needs. For reward-based crowdfunding, set attractive rewards for supporters to create incentives and increase motivation to support your campaign.
Launch Your Campaign: Once your campaign page is ready, officially launch your crowdfunding campaign on the platform. Spread the word about your campaign through social media, email marketing, personal contacts, and other channels to gain supporters and increase interest in your project.
Communicate Regularly with Supporters: Keep your supporters updated throughout the campaign and communicate regularly about the progress of your project. Be transparent about successes, challenges, and milestones to build trust with supporters.
Manage Your Campaign and Rewards: Carefully manage incoming contributions and rewards during the campaign, ensuring you fulfill promises to your supporters. Be open to feedback and requests from supporters to ensure a positive experience for all involved.

By following these steps and actively promoting your campaign, you can increase the chances of a successful crowdfunding campaign and obtain the financial support you need for your project.

Frequently Asked Questions:

What is Crowdfunding and How Does It Work? Crowdfunding is a financing method where many people (the “crowd”) contribute small amounts of money to a project or initiative. These contributions are collected through an online platform to fund the project. There are different types of crowdfunding, including reward-based, equity-based, loan-based, and donation-based crowdfunding.Example: A musician wants to record a new album and starts a crowdfunding campaign to cover the costs of studio time, production, and release. Fans and supporters can contribute money and receive exclusive rewards such as signed CDs, concert tickets, or VIP access to events.
What Types of Crowdfunding Are There?
- Reward-based Crowdfunding: Supporters receive rewards or incentives for their contributions.
- Equity-based Crowdfunding: Investors receive shares in a company in exchange for their investment.
- Loan-based Crowdfunding: Investors lend money to the project or company and receive it back later, often with interest.
- Donation-based Crowdfunding: Donors give money without expecting any material return, often for charitable causes or creative projects.
Which Platforms Are Available for Crowdfunding and Which Is Best for My Project? There are many crowdfunding platforms such as Kickstarter, Indiegogo, GoFundMe, Startnext, and many others. The choice of platform depends on various factors, including the project type, target audience, funding goals, and desired features. It is important to consider the fees, policies, and terms of each platform and choose one that fits your specific needs.Example: A technology-based startup might choose Kickstarter to reach a broad supporter base and international reach, while a non-profit project might choose GoFundMe for its simple setup and use.
How Do I Create a Successful Crowdfunding Campaign?
- Formulate a clear project idea and message.
- Set attractive rewards or incentives for supporters.
- Create an appealing and informative campaign page.
- Develop a comprehensive marketing and promotion strategy.
- Maintain communication with potential supporters and regularly update.
- Monitor the campaign regularly and adjust as needed.
Example: A successful crowdfunding campaign for a book project might include a well-written description of the book, attractive rewards like signed copies or exclusive book previews, appealing images and videos, and active social media promotion.
What Are the Legal Aspects and Risks of Crowdfunding? Legal aspects of crowdfunding include compliance with tax and financial laws, ensuring transparency and fairness to supporters, adhering to the terms and conditions of the crowdfunding platform, and considering potential liability risks associated with the project.Example: A project initiator should ensure they pay all relevant taxes on the raised funds and comply with the legal requirements of their country or region regarding crowdfunding and financing.
How Do I Set Realistic Funding Goals for My Crowdfunding Campaign? When setting funding goals, it is important to consider the actual costs of the project, including production costs, distribution costs, marketing expenses, and crowdfunding platform fees. It is advisable to set realistic goals that are achievable and plan for a buffer zone if necessary.Example: A filmmaker might set their funding goals based on the estimated costs for filming, post-production, distribution, and marketing, and also consider unforeseen expenses.
What Role Do Marketing and Promotion Play in a Crowdfunding Campaign? Marketing and promotion are crucial to the success of a crowdfunding campaign as they help increase the visibility of the project, attract potential supporters, and boost interest and participation in the campaign. Effective marketing strategies include social media advertising, email marketing, content marketing, influencer marketing, and PR efforts.Example: A crowdfunding campaign for a new product might involve influencers from the relevant industry to promote the product and leverage their reach to attract potential supporters.
How Do I Communicate Effectively with My Supporters During the Campaign? Effective communication with supporters during the campaign is crucial to maintaining interest, answering questions, and building trust. This can be achieved through regular updates, personalized thank-you messages, live events, FAQ sections, and open dialogues on social media.Example: A project initiator could send weekly updates via email, host live Q&A sessions on social media platforms, and send personalized thank-you messages to supporters to engage them in the process and appreciate their support.
What Are the Pros and Cons of Crowdfunding Compared to Traditional Financing Methods?
- Pros: Access to capital without traditional financing, the ability to build a community around the project, lower barriers to entry for entrepreneurs and creatives.
- Cons: Risk of campaign failure, dependence on external supporters, additional effort for marketing and promotion, fees and commissions of the crowdfunding platform.
Example: A traditional bank loan may offer lower interest rates and more security, while crowdfunding offers more creative freedom and direct contact with supporters but also comes with more uncertainties.
How Do I Deal with Failures or Challenges During My Crowdfunding Campaign? It is important to be open and transparent about failures or challenges during the crowdfunding campaign to maintain supporters’ trust. This can be achieved through regular updates, clear communication about obstacles and solutions, and a willingness to receive feedback and make adjustments.Example: If a crowdfunding campaign does not reach its funding goal, the project initiator might consider alternative financing options, revise the campaign, or continue the project on a smaller scale.
What Are the Tax Implications of a Successful Crowdfunding Campaign? The tax implications of a successful crowdfunding campaign can vary depending on the country and type of funding. In some cases, the raised funds may be considered income or capital gains and therefore subject to the relevant tax regulations. It is advisable to consult with a tax advisor or financial expert to understand the tax implications of your crowdfunding campaign and act accordingly.Example: A project initiator might set aside a portion of the raised funds for tax obligations or pay taxes on the received revenues to avoid legal consequences.
How Do I Choose the Right Rewards or Incentives for My Supporters? When selecting rewards or incentives for supporters, it is important to make them attractive, relevant, and appropriate. Consider the interests and needs of your target audience and offer rewards that provide real value and motivate support for your campaign.Example: A crowdfunding campaign for an art project might offer rewards such as limited edition prints, personalized artworks, exclusive workshops, or VIP tickets to exhibitions to appeal to art enthusiasts and motivate them to support the campaign.
How Do I Find Potential Supporters for My Crowdfunding Campaign? Potential supporters for your crowdfunding campaign can come from various sources, including personal contacts, social networks, online communities, industry contacts, and media presence. Use these resources to expand your network, generate interest in your project, and identify potential supporters.Example: A project initiator might target influencers or thought leaders in their industry to gain their support for the campaign and leverage their reach to attract new supporters.
What Happens to the Raised Money If My Funding Goal Is Not Reached? If the funding goal of a crowdfunding campaign is not reached, supporters typically have the option to withdraw their contributions or the money is not collected. In some cases, the project initiator may still have access to the raised funds but in a reduced amount and continue the campaign or project on a smaller scale.Example: If a crowdfunding campaign for developing a new app does not reach its funding goal, the project initiator might continue the development but with fewer resources or at a slower pace, or consider alternative financing options.
How Do I Measure the Success of My Crowdfunding Campaign and Which Metrics Are Important to Track? The success of a crowdfunding campaign can be measured by various metrics, including reaching the funding goal, the number of supporters, the amount of money raised, engagement rates on the campaign page, conversion rates from visitors to supporters, and feedback and reactions from the community.Example: A project initiator might regularly collect and analyze data on visitor numbers, contributions, engagement rates, and feedback to evaluate the success of the campaign and make future decisions.

Some of the most well-known and successful crowdfunding ideas have revolutionized various industries and paved the way for creative innovations. Here are some examples:

Pebble Time Smartwatch: Pebble Time was one of the first successful crowdfunding campaigns on Kickstarter in the smartwatch sector. The campaign raised over $20 million, paving the way for the development and popularization of smartwatches.
Oculus Rift Virtual Reality Headset: Oculus Rift was a groundbreaking crowdfunding idea that made virtual reality technology accessible to a broad audience. The campaign on Kickstarter raised over $2 million and eventually led to an acquisition by Facebook.
Exploding Kittens Card Game: Exploding Kittens is a popular card game that raised over $8 million during a crowdfunding campaign on Kickstarter. The game was developed by the creators of the popular webcomic “The Oatmeal” and became a viral hit.
Coolest Cooler: The Coolest Cooler is a multifunctional cooler with integrated speakers, a blender, and other features. The crowdfunding campaign on Kickstarter raised over $13 million and became a symbol of successful crowdfunding projects.
Flow Hive Beehive: The Flow Hive beehive revolutionized beekeeping by allowing beekeepers to harvest honey easily and cleanly without disturbing the bees. The crowdfunding campaign on Indiegogo raised over $12 million and sparked worldwide enthusiasm.
Reading Rainbow App: The crowdfunding campaign for the Reading Rainbow app on Kickstarter raised over $5 million and enabled the popular TV show “Reading Rainbow” to be revived as an interactive learning app for children.
Potato Salad: One of the quirkiest crowdfunding ideas was a campaign by a man named Zack “Danger” Brown on Kickstarter to raise money to make potato salad. Although the idea was initially intended as a joke, the campaign raised over $55,000, becoming a viral phenomenon.
The Veronica Mars Movie Project: Fans of the TV series “Veronica Mars” started a crowdfunding campaign on Kickstarter to finance a feature film based on the series. The campaign raised over $5 million and eventually led to the production of the movie.
Treehouse Hotels: A company called Treehotel in Sweden funded the construction of extraordinary treehouse hotels through crowdfunding. The campaign raised over $700,000 and enabled the creation of unique accommodations in the forests of Lapland.
Pottermore: Author J.K. Rowling started a crowdfunding campaign on Kickstarter to develop an interactive online platform called Pottermore, which offers readers an immersive experience of the Harry Potter books. The campaign raised over $1 million and helped bring the platform to life.
Solar Roadways: Solar Roadways is an innovative project that integrates solar panels into road surfaces to generate clean energy and improve infrastructure. The crowdfunding campaign on Indiegogo raised over $2 million and helped advance the project.
Glow-in-the-Dark Plants: A team of biotechnologists started a crowdfunding campaign to develop genetically modified plants that glow in the dark. The campaign on Kickstarter raised over $480,000 and contributed to the research and development of this technology.

Success Stories from People Who Realized Their Business Idea Through Crowdfunding:

Organic Honey: Jenny, a passionate beekeeper, started a crowdfunding campaign to realize her vision of sustainable organic honey. Thanks to the generous support of the crowdfunding community, she was able to finance her first beehive project and produce high-quality honey that was well received in her local community and beyond.
Tech Startup: A team of tech enthusiasts developed an innovative mobile app that helps people better manage their personal finances. Through a successful crowdfunding campaign, they were able to fund the development and launch of their app. Today, their app is one of the leading platforms in its field and is used by millions of users worldwide.
Eco-Fashion Brand: A young designer had the vision to create a sustainable fashion brand offering ethically produced clothing from eco-friendly materials. With the help of a crowdfunding campaign, she was able to cover the production costs of her first collection and successfully launch her brand. Today, her company is known for its stylish and environmentally conscious fashion.
Food Truck Business: A couple with a passion for good food dreamed of starting their own food truck business, offering delicious and innovative dishes. Through a successful crowdfunding campaign, they were able to finance the purchase of their first food truck and bring their culinary vision to life. Their food truck is now a popular spot for food lovers in their city.
Children’s Book Author: An aspiring children’s book author had the idea for a charming story about adventure and friendship. Thanks to the generous support of crowdfunding backers, he was able to finance the illustrations and printing of his book. His book became a bestseller and encouraged him to write and publish more stories.
Community Garden Project: A group of neighbors wanted to create a community garden in their neighborhood to grow fresh fruits and vegetables and strengthen the local community. Through a successful crowdfunding campaign, they were able to cover the costs of establishing the garden and realize their vision of a green and thriving space that everyone can enjoy.

These extraordinary ideas show the diversity and creativity that exists in the crowdfunding sector. From quirky projects to groundbreaking innovations, there are endless possibilities to gain support for unconventional ideas through crowdfunding.

Glossary of Terms:

Campaign: A crowdfunding campaign refers to the period during which a project is active on a crowdfunding platform and raising money from supporters.
Supporter: Individuals or organizations that contribute money to a crowdfunding project.
Reward: A return that a supporter receives for their financial backing, usually in the form of a product, service, or experience.
Funding Goal: The amount of money a project owner aims to raise through their crowdfunding campaign to finance their project.
Platform: A website or online marketplace where crowdfunding campaigns can be created and conducted.
Success Rate: The percentage of crowdfunding campaigns that reach or exceed their funding goal.
Venture Capital: Financial resources provided by supporters to finance a project without expecting a direct financial return.
Funding Threshold: The minimum amount a project owner must reach to receive the collected funds. If the threshold is not met, supporters typically get their money back.
Stretch Goals: Additional funding goals that can be achieved if a crowdfunding campaign exceeds its original goal. These goals may include additional features, products, or rewards for supporters.
Investment-based Crowdfunding: A form of crowdfunding where investors contribute money to a project and receive a financial stake or return in exchange.
Perk: Additional benefits or rewards that supporters receive for their financial backing, often in the form of exclusive products, services, or experiences.
Early Bird: An offer or reward for supporters who contribute early to a crowdfunding campaign.
All-or-Nothing: A type of crowdfunding model where a project owner only receives the collected funds if the funding goal is reached. Otherwise, supporters get their contributions back.
Flexible Funding: A type of crowdfunding where a project owner can keep the collected funds regardless of whether the funding goal is reached or not.
Investor: An individual or organization that invests money in a project in exchange for a financial return, typically in the form of interest, dividends, or shares in the company.
Sponsor: An individual, organization, or company that provides financial support for a crowdfunding project, often in exchange for advertising or other benefits.
Pitch: A short presentation or description of a crowdfunding project intended to convince potential supporters to contribute money.
Update: Updates or news that project owners publish during a crowdfunding campaign to inform supporters about the project’s progress.
Venture Capitalist: An individual, organization, or firm willing to invest financial resources in a crowdfunding project to capitalize on the potential for high returns while also accepting the risk of loss.
Community: The group of supporters, fans, and interested parties who back and promote a crowdfunding project. The community can play a crucial role in promoting and spreading the word about a project.
Starter: The initiator or project owner who creates and leads a crowdfunding campaign to obtain financial support for their project.
Backer: An individual who contributes money to a crowdfunding project to support and promote it.
Campaign Manager: An individual or team responsible for managing and running a crowdfunding campaign, including creating content, communicating with supporters, and conducting marketing activities.
Funding Period: The period during which a crowdfunding campaign is active and raising money from supporters.
Success Fee: A fee or commission that a crowdfunding platform retains from the collected funds of a successful campaign.
Perks: Additional benefits or rewards that supporters receive for their financial backing, often in the form of exclusive products, services, or experiences.
Social Proof: The concept that people tend to follow the actions and decisions of others, especially when those actions are perceived as popular or successful. Social proof can help increase interest in a crowdfunding campaign and boost supporter participation.
Milestone: An important milestone or success point during a crowdfunding campaign that is reached when specific goals or thresholds are achieved, such as reaching a particular funding goal or attaining a certain number of supporters.
Virality: The ability of a crowdfunding campaign to spread quickly and organically through social networks and other channels, leading to exponential growth in support.
Funding Model: The specific model or method by which a crowdfunding campaign raises money, such as “all-or-nothing,” “flexible funding,” or “equity crowdfunding.”

Understanding these terms is essential for anyone involved in or considering starting a crowdfunding campaign. By familiarizing yourself with these concepts, you can better navigate the crowdfunding landscape and increase the chances of a successful campaign.