There are different types of crowdfunding models, including:
- Reward-based crowdfunding: Contributors receive rewards or perks based on their level of financial support. These rewards can vary based on the campaign, ranging from a thank-you note or early access to the product being funded.
- Donation-based crowdfunding: Contributions are purely donations, often associated with causes or charities. Contributors support the project without expecting any financial returns or rewards.
- Equity-based crowdfunding: Investors provide funding in exchange for equity or shares in a company or project. This model is often used by startups or small businesses to raise capital and offer potential returns on investment.
- Debt-based crowdfunding: Also known as peer-to-peer lending, this model involves individuals lending money to borrowers who repay the loan with interest over time.