What is crowdfunding?

Crowdfunding is fundamentally defined as an internet-based method where individuals or groups raise small amounts of money from a large number of people, often referred to as "strangers." This system leverages online platforms to connect entrepreneurs with potential backers who are interested in supporting their business ventures. It's accessible to anyone with an idea, allowing them to present their project or company to a global audience and receive funding from those who believe in their concept.

The essence of crowdfunding lies in its democratization of the funding process, as it provides an opportunity for anyone, not just traditional investors or banks, to contribute financially to startups and projects. This method differs significantly from forms of financing like bank loans or professional investments, which typically involve more stringent criteria and established relationships.

While other options mention methods of funding, they do not capture the broader and more inclusive nature of crowdfunding that allows for contributions from a diverse group of individuals rather than relying solely on charitable donations, professional investors, or bank financing.