Crowdfunding
Definition
Crowdfunding raises money from many small contributors online, in reward-based (pre-orders), equity-based (shares), or debt-based forms.
How it comes up in fundraising
Consumer hardware startups use reward crowdfunding to validate demand and finance production; equity crowdfunding lets retail investors buy actual shares under regulated caps.
Frequently asked questions
Does crowdfunding hurt future VC rounds?
Reward campaigns are usually neutral or positive (demand proof); messy equity crowdfunding cap tables can add friction, so use platforms that pool investors into one entity.
How much can startups raise via equity crowdfunding?
US Regulation Crowdfunding allows up to $5M in a 12-month period, with tiered disclosure requirements.
Related terms
Put this term to work
Definitions win negotiations only when you are in one. Find the investors who fund your stage and start the conversation.
Browse the investor database