Crowd funding is a concept that involves the process of raising funds from a group of people for a particular project or business.
This is usually done via the internet where a person will describe his project and the total amount required.
Then it will be up to the public to contribute money to the project until it hits the targeted amount of funding, at which point it will close.
Some of these crowd funding projects can be charitable in nature like raising funds for disaster relief. These projects will not come with any payoffs to the contributor.
Others might be a one-man startup raising funds for software development, or even a company selling small amounts of equity stakes to small investors. In these kinds of projects, contributors or investors will have to access the potential and viability of the opportunities.
These sites act as a broker, which try to match people who are raising funds and people who would like to contribute funds.
The press has also been giving publicity to the crowd funding idea, and as more and more people become aware of it, the potential for it will also grow.
Some of us might even consider investing in some of these crowd funding ventures as the lure of potential returns could be enticing. However, it is also important to be able to discern good projects from the lousy, and to avoid projects that are outright scams.
I will be sharing some of my personal experiences on crowd funding in my next post.