By definition, crowdfunding is a way to finance business through a large number of people raising funds and making monetary contributions. It is generally achieved by using the internet through websites that allow business people to raise money; however, the concept can also be implemented by other means.

Recently, in the business world, Crowdfunding is now a progress, whether for a startup or a running business. According to Massolution, a US-based research agency, entrepreneurs have raised billions of dollars with over 600 crowdfunding sites around the world. There's no doubt that crowdfunding is here to stay, and it's a fresh source of funding for innovative new companies, non-profits seeking grants, and artistic acclaim.

Indiegogo, Kickstarter, LendingClub, and Fundable are among several of the various crowdfunding sites available. To exchange for extra benefits, contributions are received on these sites. While each platform offers its terms, across all sites, the general concept is the same.

It is also possible to use crowdfunding to raise loans and interest support. For example, the LendingClub website allows users to lend and borrow directly from each other, excluding the middleman in the process from the banking. The idea is to bring together people in business and investors. It also aims to sell company shares or company ownership stakes on crowdfunding websites, just like an initial, unlimited public offering.

What makes crowdfunding attractive is that it allows startups or early-stage companies to introduce a product or service without introducing the company to the lender or the loan officers ' whims and quirks. A good crowdfunding campaign not only provides the necessary money to a company but also creates a community of consumers who believe it is their responsibility to patronize the business because they have an interest in their success.

Crowdfunding has a huge advantage for a start-up company, but it's not without its drawbacks. For example, if the project is not well organized, it could be a huge waste of time. When you hit that target, it could be even worse, but then you know that you underestimated how much cash you wanted. Your reputation is not only at risk here, but if consumers refuse to deliver on their promise, they can also sue a company.

Another problem is that when a bank or lender sponsors a company, business mentorship is offered to investors, but when they opt for crowdfunding, they miss out on such mentorship.

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