Crowdfunding Professional Association

(CfPA) The American industry trade organization dedicated to facilitating a vibrant, credible and growing crowdfunding community, from investors through service providers to entrepreneurs. See http://crowdfundingprofessional.org for more information.¹

Related Terms

SEC | JOBS Act | Issuer

Related Articles

Crowdfunding – The Most Usual Source of Startup Funding [Infographic]

What can I do if I’ve run out of budget for my start-up?

5 Lessons on Startup Capital: Marathon Investments vs. Sprint Funding

Crowdfunding Intermediary Regulatory Advocates

Cumulative Preferred Stock

FundingSage

Definitioner

Human Relations

CfPA

Crowdfunding Professional Association

Crowdfunding

“Crowdfunding” is the process of raising financial support for a venture via smaller amounts from many investors (“the crowd”), rather than the alternative pattern of larger amounts from a smaller number of supporters. Charities and philanthropies have traditionally employed both fundraising strategies (soliciting both the general populace, or crowd, as well as fewer wealthier donors), while businesses have usually taken the route involving fewer and larger supporters. Today’s internet has vastly increased the ability of fundraisers to communicate information, solicit and receive financial support from anyone on-line. Crowdfunding without the expectation of financial return, or with the promise of a specific good or service, are termed “donation-based” or “reward-based” crowdfunding, are in the nature of charitable solicitation or business marketing, and have never been illegal in the U.S. In contrast, soliciting funds in return for a ownership interest or expectation of repayment, are termed “equity-based” or “debt-based” crowdfunding (together grouped as “securities-based” crowdfunding), and have been until now governed (and effectively prevented) by federal and state securities law. One of the most significant parts (Title III) of the federal “Jumpstart Our Business Startups”, or JOBS Act of 2012 specifically enabled and legalized “security-based crowdfunding”, subject to a variety of regulations and restrictions.¹

Related Articles

Crowdfunding – The Most Usual Source of Startup Funding [Infographic]

5 Lessons on Startup Capital: Marathon Investments vs. Sprint Funding

Moving Series A Startup Funding from “Anguish” to “Accelerate”

INFOGRAPHICS

INFOGRAPHICS

FundingSage

Popular Posts (Past Month)