Aidbit Documentation & Guides
Donation Model:The donation model of crowdfunding is a means for charities, or those who raise money for social or charitable projects, to gather a community online and enable them to donate to a project. While most established charities facilitate this through their website, crowdfunding is popular for small organizations and people raising money for personal or specific charitable causes.
Lending Model:Crowdfunded lending is largely an evolution of the peer–to–peer model of lending. Projects or businesses seeking debt apply through the platform uploading their pitch, with members of the crowd taking small chunks of the overall loan.
Reward Model:The model allows people to contribute to projects and receive non–financial rewards in return, usually operating a tiered system where the more you donate the better the reward you receive. The model often closely resembles philanthropy with the donation far exceeding the monetary value of the reward or the reward costing the fundraiser little, such as experience or recognition–related rewards. In these cases, entrepreneurs or artists crowdfund the production cost of their record, movie, game, or product and allow the donors to be the first recipientsonce the production is complete.
Investment Model:The final type is the application of crowdfunding to investing for equity, or profit/revenue sharing in businesses or projects. This form of the model has been the slowest to grow due to regulatory restrictions that relate to this type of activity.