What is crowdfunding?

"Crowdfunding" is a method of financing whereby money is attracted via the internet by large numbers of small financiers, each of whom invests relatively small amounts. Thanks to the internet, it is possible to reach many people, win their trust, and thus raise money at low costs. Many small contributions therefore collectively form a large amount by appealing to the masses, or the 'crowd'.

Crowdfunding is used by, amongst others, charities, start-ups, scale-ups, and commercial and political organisations to raise money. The 'goodwill factor' often plays an important role here, because investors must be willing to donate or invest out of sympathy or trust.

This form of financing is a component of crowdsourcing, where not only money but also knowledge, services, or other forms of support are collected by the masses.