Tools for Business

Funding your business online using crowdfunding

Crowdfunding refers to raising funds from people online. There are four types of crowdfunding: loans, "deals", donations, and equity. The first three are not regulated. Loan crowdfunding involves borrowing from people online. No ownership is involved. "Deals" involves providing an incentives for someone to give a small amount of money, for something that you will give them later on. No ownership is involved. Donations involve having people give you money because they believe in your cause or in you. Equity crowdfunding involves selling a share of your business to someone.

Of the four options, only equity crowdfunding is regulated. Because of that, people who raise equity funds using crowdfunding must follow the rules. Here are links for more information about crowdfunding