INTRODUCTION:

Crowd funding is a novel method for funding a variety of new ventures, allowing individual
founders of for-profit, artistic, social projects and cultural ventures to fund their efforts by
drawing on relatively small contributions from a relatively enormous number of people by
using the web, without standard financial intermediaries. Essentially Crowd funding is the
practice of funding a project or venture by raising small amounts of money from large
number of people, basically via the internet or such dedicated websites.
Crowd funding draws inspiration from concepts like micro-finance and crowd sourcing, but
represents its own unique category of fundraising, facilitated by a growing number of internet
sites devoted to the topic. As in any emergent field, the popular and academic conceptions of
crowd funding are in a state of evolutionary flux that makes complete definitions arbitrarily
limiting. Crowd funding projects can extend greatly in both goal and magnitude, from
compact artistic projects to entrepreneurs seeking hundreds of thousands of dollars in seed
capital as an alternative to traditional venture capital investment. Crowd funding is innovative
way of sourcing funding for new projects, businesses or ideas most often used by start-up
companies or growing businesses as a way of accessing alternative funds.
The term Crowd funding has its origin from crowd sourcing, collective development process
of a product. Crowd funding can refer to initiative of any kind from the aid during human
tragedies to support art and cultural heritage, the citizen Journalism, to innovative
entrepreneurship and scientific research. Crowd funding is often used to promote innovation
and social change, breaking down the traditional barriers to financial investment. The web is
usually the platform that allows the meeting and collaboration of the parties involved in a
crowd funding project.
Crowd funding is defined as an open call over the Internet for financial resources in the form
of a monetary donation, sometimes in exchange for a future product, service, or reward.
Crowd funding facilitates transactions between creators (those who request funds) and
funders by utilising web technology and current online payment methods (people who give
money).
Understanding crowd funding is critical as small individual contributions from creators and
funders can lead to the formation of new companies, the realization of new professional
identities, and fundamentally impact how we function economically and socially is changing
as a result of changes in how, why, and which products and services are created.

TYPES OF CROWDFUNDING:
1. DONATION-BASED CROWD FUNDING: Donation based crowd funding is one of
the most popular types of fundraising, it simply ask for a sum of money as a small
donation from a large number of individual to raise money for mainly community
based project. 
How Does Donation-Based Crowd funding Work?
Donation-based crowd funding is used to raise money for personal needs as well as
community-based projects. One can share his fundraiser with his own network and on
social media as a way to amplify awareness and encourage more donations. Examples
of donation-based crowd funding include raising money to cover medical expenses or
an unexpected financial crisis, or raising funds for local projects like a community
garden or new park.  
2. REWARD-BASED CROWD FUNDING: Rewards-based crowd funding is another
common type of crowd funding, typically used to raise funds for a new start-up or
organization that offers a product or service. 
How Does Reward-Based Crowd funding Work?
In rewards-based crowd funding, donors or funders can earn rewards based on the
amount of money they donate. Common rewards include handmade objects, prizes
donated by partner companies, or free goods or services offered by the fundraiser
organizer. For example, an artist who is raising funds to start an art collective and
gallery could offer original signed artwork, replica prints, or even a free art workshop
based on the amount donated.   
3. EQUITY BASED CROWD FUNDING: Also called as crowd-equity or investment
crowd funding or crowd investing, equity crowd funding is prime for small to
medium-sized companies that are searching for a huge amount of capital to launch or
diverse their business.
How Does Equity Crowd funding Work?
In return for donations, donors receive a percentage ownership in the company. This
percentage differs depending on the business, and can be a significant way for
companies to quickly raise funds without the headache of a traditional business loan.
Normally, equity based fundraising requires huge fundraising minimums, typically
into the thousands of dollars.   
4. DEBT CROWD FUNDING: Also called as peer-to-peer lending or crowd lending,
debt crowd funding is a speedy and reliable way for both individuals and businesses
to raise the money they need, when they need it. 
How Does Debt Crowd funding Work?
Debt-based crowd funding works by collecting funds with the promise of repaying
them later. Debt crowd funding is generally used by businesses that need capital, and
that prefer to pay back the funds rather than give out equity. Individuals also apply
debt crowd funding when they require money to pay off a loan or other financial
obligation. With a debt fundraiser, confirm to clearly state for what purpose the
money is required for and when donors can expect repayment.  
5. REAL ESTATE CROWD FUNDING: Among the recent types of crowd funding
models, real estate crowd funding is becoming more popular for investors who want
to put their money in real estate, without the struggle of getting a traditional loan or
the obligation of owning all of a single property. 
How Does Real Estate Crowd funding Work?
Typically, an individual or a real estate company will collect funds from investors to
pay for a large property, like an apartment building. With real estate crowd funding,
investors can donate much smaller amounts of money usually starting at $5,000
depending on how much of the property they would like to own. Investors will then
receive payouts each quarter, depending on how much revenue the property generates.