CROWDFUNDING

Abstract

Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people. Crowdfunding is a form of alternative finance, which has emerged outside of the traditional financial system. History The earliest recorded use of the word "crowdfunding" was by Michael Sullivan in fundavlog. Crowdfunding gained traction after the launch of ArtistShare, in 2003. After that, more crowdfunding sites started to appear on the web such as Kickstarter and GoFundMe. Crowdfunding websites helped companies and individuals worldwide raise US$89 million from members of the public in 2010. This number raised to US$5.1 billionin 2013. Model The crowdfunding model is based on three types of actors: the project initiator who proposes the idea and/or project to be funded; individuals or groups who support the idea; and a moderating organization that brings the parties together to launch the idea.