What is Crowdfunding?

The Internet, Developers, and Entreprenuers are buzzing about "Crowdfunding"...but what is crowdfunding exactly?  We will start with what Wikipedia says:
Crowdfunding (alternately crowd financing, equity crowdfunding, crowd-sourced fundraising) explains 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.  
Crowdfunding has its origins in the concept of crowdsourcing, which is the broader concept of an individual reaching a goal by receiving and leveraging small contributions from many parties. Crowdfunding is the application of this concept to the collection of funds through small contributions from many parties in order to finance a particular project or venture.  
Crowdfunding models involve a variety of participants. They include the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the "platform") which brings together the project initiator and the crowd. -WIKI

In short crowdfunding is a way to raise money for an activity, businesses and the like.  The law surrounding the activity is mixed and entrepreneurs whom have large scale financing activities planned in the future may catch a headache in paper work sorting out initial investments (and generally they are not classified investments, but donations).

Just setting up a profile on a crowdfunding site won't raise you all the money you need either!!! BE WARE!! Uploading the profile on a major crowdfunding site is the LAST step in your fundraising activity.  Before your profile, you must build momentum and have a strong following that you can send to the site to purchase/invest in your venture.  Generally, people are not searching crowdfunding sites to give their money away, rather communities and organizations send their patrons or members to the sites to make donations.  Groups with large social media followings prior to launching campaigns do extremely well, active followers (ie twitter, facebook friends, instagram followers) are more prone to click and send money.  Philanthropies are probably the biggest winners in the space.

Your experiences and thoughts surfing and working the Internet are the real last say.  We would like to hear what you think about crowdfunding or some experiences you have had, feel free to comment below.

Hope this was helpful,

The PushYourRank Team
Author: Nicholas Coriano

About The Author: Nicholas Coriano is an Entrepreneur, Web Developer, Social Media Marketer, SEO Consultant and the founder of this blog and The NewYorkWebsiteDesignCenter.com.  While developing websites for his own businesses and marketing his entrepreneurial ventures online, he began blogging useful tips and "how-to" articles on PushYourRank.com for reference purposes.  To retain Nicholas for help with your Website, Social Media, SEO or other online/technology needs, email PushYourRank@Gmail.com

About PushYourRank.com: PushYourRank.com (the Blog) is a blog that helps small businesses, start-ups, developers, amateurs website builders, bloggers and entrepreneurs develop their websites, their social media presence, their search engine optimization techniques and more ....online.  The Blog publishes articles about Ecommerce, Email Marketing and How To Make Money Online...as well as any topic that pertains to the Internet or Online.  If you need help developing a website, SEO or Social Media outsourcing, see NewYorkWebsiteDesignCenter.com, if you would like to advertise or have us publish an article on a certain subject, please email us at PushYourRank@Gmail.com