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Crowdfunding Glossary

Crowdfunding Glossary

 

Crowdfunding – A method of raising capital through the collective effort of friends, family, customers, and individual investors.

Donation-based crowdfunding – Any crowdfunding campaign in which there is no financial return to the investors or contributors.

Equity-based crowdfunding – Any crowdfunding campaign that allows contributors to become part-owners of your company by trading capital for equity shares.

Rewards-based crowdfunding – Any crowdfunding campaign that involves individuals contributing to your business in exchange for a “reward,” typically a form of the product or service your company offers.

Project creatorA project creator is the person or team that has the project idea and working to turn the idea becomes reality. Project can be business and startup.

 

BackerBackers are folks who chipping in the money to join creators in bringing projects to life.

 

Soft launch – Getting the word out to your audience—friends, family, existing customers—about your upcoming crowdfunding campaign, usually at least a month before your actual launch. Using social media, email marketing, and word-of-mouth, this is an effective way to build awareness and make an initial pitch before actually asking for money.

 

OverfundingOnce your project has reached it's initial target, continues to accept additional backing. This is called 'overfunding'.

Flexible fundingIn a flexible funding campaign, the project creators keeps all funds backed regardless of whether or not the project meets its stated funding goal. Only applicable to projects fall under charity category.

Fixed fundingAll or nothing. In a fixed funding campaign, the project creators keeps all funds backed if meet your goal. Applicable to all projects except projects fall under charity category.