Donation based crowdfunding

Crowdfunding campaign in which there is no financial return to the investors or contributors as donation-based crowdfunding. Common donation-based crowdfunding initiatives include fundraising for disaster relief, charities, nonprofits, and medical bills.

Rewards-Based Crowdfunding

Rewards-based crowdfunding involves individuals contributing to your business in exchange for a reward, in a form of the product or service which your company is offering. Even though this method offers investors a reward, it’s still generally considered a subset of donation-based crowdfunding since there is no financial or equity return.

Peer-to-Peer Crowdfunding

In Peer-to-Peer lending, an online platform matches lenders/investors with borrowers/issuers in order to provide unsecured loans and the interest rate is set by the platform. Some Peer-to-Peer platforms arrange loans between individuals, while other platforms pool funds which are then lent to small and medium-sized businesses.

Equity-Based Crowdfunding

Unlike the donation-based and rewards-based methods, equity-based crowdfunding allows contributors to become part-owners of your company by trading capital for equity shares. As equity owners, your contributors receive a financial return on their investment and ultimately receive a share of the profits in the form of a dividend or distribution.

 Amount Raised from Crowdfunding different models in the year 2015

The amount raised by Donation based Crowdfunding in the year 2015 is higher i.e. $14.73 billion when compared to other types of Model, peer-to-peer lending is the next model which has raised $13.07 billion funds, whereas Equity and Reward based crowdfunding has $3.78 billion, $2.41 billion amount raised in the year 2015.

https://goo.gl/bHfLGV

According to the Securities and Exchange Board of India (SEBI) has issued laws on digital equity crowdfunding in India as “unauthorized, unregulated and illegal”.

For more details: https://goo.gl/Bw5fP7