What is crowdfunding?

Crowdfunding is defined as raising small amounts of money from a large number of people, typically via the internet. This approach allows individuals, startups, and organizations to gather financial support from a diverse group of backers who may be interested in their ideas, projects, or businesses. The internet facilitates this process by connecting creators with potential funders, often through dedicated platforms that showcase various campaigns.

Many successful ventures have emerged from crowdfunding, as it not only provides the necessary capital but also helps validate business ideas by demonstrating market interest. This method allows even those without access to traditional funding sources, like banks or venture capitalists, to pursue their entrepreneurial goals. The engagement of a broad audience can also create a community around a product or service, providing additional marketing and promotional benefits.

In contrast, the other choices reflect more traditional or limited forms of funding that do not capture the essence of crowdfunding as a participatory, internet-driven process.