By Wikipedia
Crowdfunding (alternately crowd financing, equity crowdfunding, crowd-sourced fundraising) is the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations. Crowdfunding is used in support of a wide variety of activities, including disaster relief, citizen journalism, support of artists by fans, political campaigns, startup company funding, motion picture promotion, free software development, inventions development, scientific research, and civic projects.
Crowdfunding can also refer to the funding of a company by selling small amounts of equity to many investors. This form of crowdfunding has recently received attention from policymakers in the United States with direct mention in the JOBS Act; legislation that allows for a wider pool of small investors with fewer restrictions. While the JOBS Act awaits implementation, hybrid models, such as Mosaic Inc., are using existing securities laws to enable the public in approved states to invest directly in clean energy projects as part of a crowd.
Related Reading:
Crowdfunding Equity: The Market Begins
How Cos. Can Prep for Crowdfunding
Can Mature Firms Benefit from Crowdfunding?
Mosaic Crowdfunds 4 Solar Campaigns in 24 Hours
JOBS Act Crowdfunding is Unlikely to Help Most Startups
In-Depth: ‘Crowdfunding’ Changes Game for Business, Investors
