Types of Crowdfunding

Entrepreneurs launched more than 800,000 startup companies in 2020. Instead of seeking traditional
forms of funding from a few wealthy investors, many pursued crowdfunding, which enabled them to seek
financing from a large pool of investors, often consisting of friends, family members, customers, and other
interested parties.
In this assignment, you will have the opportunity to research crowdfunding and report your findings.
To successfully complete this assignment, you will need to use the Strayer Library to research
crowdfunding. You may also consult business news websites, such as Bloomberg, CNBC, Marketplace, or
the Wall Street Journal.
Report of your findings in which you:
Accurately describe the four major types of crowdfunding.
Explain the factors that lead to successful and unsuccessful crowdfunding campaigns, using practical
Outline the steps necessary to determine whether a business is suitable for crowdfunding.
Recommend a crowdfunding platform with a track record of success.
Be sure to justify your recommendation.
Determine whether the emergence of crowdfunding poses a threat or opportunity for multinational
enterprises (MNEs).
Be sure to include your rationale.
Speculate, based on your research, how crowdfunding will affect traditional capital fundraising.
Be sure to provide evidence to support your assertions.
Use a minimum of five sources to support your writing.
Choose sources that are credible, relevant, and appropriate.

Types of Crowdfunding

Crowdfunding is when a large number of people instead of the handful of wealthy supporters, donate money to a project. The crowdfunding campaigns can be successful by attracting a large public and entice those who support them to their cause (Lukkarinen and co. 1 26). There are four kinds of crowdfunding campaigns: donation, rewards, debt and equity.


Donations are a form of crowdfunding where donors provide financial support to an organization, cause, or person without expectation of any reward in exchange. Imagine that you start an online campaign for crowdfunding to fund the purchase of new equipment to run your business. People donate money to you for nothing , but they also give you the opportunity to see your business achieve success.


Peer-to-peer lending, also known as P2P loans, are a type of crowdfunding that requires debt-based contributions. The funds of the supporters serve as loans and must be returned with interest within the specified date in loans based on debt.


The financial support received is rewarded by giving the recipient a tangible benefit. People who donate are encouraged to contribute more, by winning rewards of various amounts. T-shirts, the item or service, and occasionally even a discount off the purchase price are given to the contributors of crowdfunding campaigns.

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