Crowdfunding is the practice of funding by raising money from a large number of people who each contribute a relatively small amount that makes the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together. The term crowdfunding was reportedly coined in 2006 by a man named Michael Sullivan, who started a fundraising effort to build a video blogging community. The type of Crowdfunding is a debt, donation, reward and equity crowdfunding. The Crowdfunding requires generally three plays: the initiator who proposes the idea to be funded; expert people who support the idea, and the organiser or operator that brings the parties together to launch the idea. Total Global Crowdfunding Industry estimated fundraising volume in 2015: $34 Billion (P2P Lending $25B; Reward and Donation $5.5B; Equity $2.5B), typically most successful startup fundraising efforts receive about 25-40% of their target from their close connections.
Reference Information from Statista.com: Transaction value in the Crowdfunding segment is projected to reach US$940.9m in 2020. Transaction value is expected to show an annual growth rate (CAGR 2020-2024) of 5.8% resulting in a projected total amount of US$1,180.5m by 2024. The average funding per campaign in the Crowdfunding segment amounts to US$5,270 in 2020. From a global comparison perspective it is shown that the highest transaction value is reached in the United States (US$438m in 2020).
Related Definitions in the Project: The Commercial Definitions
