Crowdfunding Definition – The Different Perspectives

Definition is defined as a statement of the exact meaning of a given word. You must be having some knowledge about crowdfunding. But have you ever thought what is the crowdfunding definition. Well, to be honest, they are a lot! Seriously a lot. Different people have given a crowdfunding definition on the basis of their own understanding. Knowing different of them, would help you understand the topic better. You can gain some good knowledge about the topic. So here are some different definitions of crowdfunding and some substantiation for them.


#Crowdfunding Definition 1

“The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.”

This is the dictionary definition of crowdfunding. Quite simple to understand, but this definition mainly focuses on the crowdfunding done by the internet. Though it is the most popular way of crowdfunding, there are other offline alternatives too available. Though the good part of this crowdfunding definition is that it says funding projects and ventures. It does not limit the aspect to businesses alone.

#Crowdfunding Definition 2

“Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. ”

This crowdfunding definition is quite a simple and easy to understand one. As mentioned, funds are collected from crowds, or masses. Each person from the crowd invests small amounts. But due to the size of the crowd, the amount collected becomes quite large. The only minus of this definition is that it is limiting the concept of crowdfunding to business ventures.

#Crowdfunding Definition 3

“Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.”

This crowdfunding definition basically focuses on the offline part of crowdfunding. It emphasises on how a person can collect money without using a website or the internet in general. It concentrates on how individual and group efforts can raise funds for any venture or project.

#Crowdfunding Definition 4

“Crowdfunding is a financing method that involves funding a project with relatively modest contributions from a large group of individuals, rather than seeking substantial sums from a small number of investors.”

This crowdfunding definition is quite an interesting one. Since it focuses on the difference between the regular fundraising methods and crowdfunding. Thus, making it simpler for a beginner to understand. It says that in crowdfunding, many people contribute small amounts. While in other methods, large amounts are contributed by a few people.

#Crowdfunding Definition 5

“Crowdfunding is asking a crowd of people to donate a defined amount of money for a specific cause or project in exchange for various rewards.”

The important addition this definition does in the crowdfunding concept is the concept of rewards. Since Crowdfunding mainly revolves around the concept of rewards, it cannot be ignored. When people invest in a project or venture, the project developers provide them with some rewards.


Each crowdfunding definition has something to add. Each one has something more to teach you.