Crowdfunding Blog

What does the term “crowdfunding” mean?

What does the term “crowdfunding” mean?

Crowdfunding definition Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. It depends on who you ask. Crowdfunding can mean different things to different people. It is not a uniformly defined term nor is it used in any …

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What is securities-based crowdfunding?

Crowdfunding as a method to raise capital is nothing new. For example, the Statue of Liberty was, in part, funded by the crowd. But the history of crowdfunding goes back much further than that. What is (relatively-speaking) new is technology and its ability to connect and enhance the otherwise disparate power of crowds and communities …

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What is rewards-based crowdfunding?

Rewards-based crowdfunding is perhaps the most recognizable type of crowdfunding. This is due in large part to the success of early movers in the space, like Kickstarter and Indiegogo. Like most crowdfunding campaigns, rewards-based campaigns typically involve small dollar contributions from individuals to projects in return for some kind of reward. Unlike securities-based campaigns, contributors …

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What is donation-based crowdfunding?

A donation-based crowdfunding campaign is one in which there is no expected tangible or financial return to the donor or capital contributor.  Many people routinely donate to charities and nonprofits online or other online fundraising campaigns that assist victims of natural disasters or persons who need financial assistance for medical bills. The primary difference between …

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What is a security?

A “security” generally refers to a financial instrument or an interest in a financial asset issued by another – typically a company. This can take the form of an equity (e.g., a residual or profit sharing) interest in a company or an interest in the debt of a company. Securities can take other forms too, …

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What are commodities? And who regulates them?

A commodity is a basic commercial good that is interchangeable with other similar goods. In the United States, it is a statutorily defined term under the Commodity Exchange Act that includes, among other things, physical commodities, such as agricultural products or natural resources, as opposed to financial instruments like currencies. Commodity futures contracts are agreements …

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Some Basics on Saving and Investing

If you want to begin down the road to financial freedom, you should first develop achievable saving and investing goals. You won’t regret taking the time now to create a personal investment plan. Some things to consider: What are you looking to accomplish? When it comes to investment goals, be specific. Think about timing and …

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Things to consider when investing in exempt securities

If you are considering investing in a private placement, or perhaps other exempt securities offerings, you ought to educate yourself on the private capital markets generally, including potentially seeking advice from a professional financial advisor. We do not provide financial advice but can identify a few objective facts to consider in advance of potentially making …

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How to think about risk and risk tolerance

The saying “no risk, no reward” applies in many contexts, but none more so than with investing. Risk is a fundamental aspect of investing. If you buy securities, especially illiquid securities in the private capital markets, you should understand that your capital will likely be locked up for a considerable period of time and that …

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A bit more on risk and its many forms

In a previous post, we wrote a bit about risk and how to think about it, including risk tolerance. Here, we write a bit more on the subject and a number of the different types of risk that investors face, including risks around: Liquidity (or Illiquidity) Liquidity refers to degree to which an asset can …

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