Crowdfunding Terms Glossary: Crowdfunding Terms in 2024
A
Accelerator
An accelerator is a program or organization that provides startups with a short-term, intensive mentoring and educational experience to help them grow and scale quickly.
Accredited Investor
An accredited investor is an individual or entity that meets certain financial requirements and is allowed to invest in securities-based crowdfunding campaigns.
All-Or-Nothing
All-or-Nothing is a crowdfunding model where a project must reach its funding goal within a specified timeframe in order to receive any funds. If the goal is not reached, all funds are returned to the backers.
Angel Investor
An angel investor is an individual who provides financial backing to startups or projects, often in their early stages, in exchange for equity or convertible debt.
Artificial Intelligence (Ai)
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines, enabling them to perform tasks, make decisions, and learn from data.
B
Backer
A backer is an individual or organization that provides financial support to a crowdfunding campaign in exchange for a reward or equity.
Big Data
Big Data refers to extremely large and complex sets of data that cannot be easily processed or analyzed using traditional techniques, often requiring advanced tools and technologies to uncover patterns, trends, and insights.
Blockchain
Blockchain is a decentralized and distributed digital ledger technology that securely records and verifies transactions across multiple computers or networks, providing transparency, security, and immutability to crowdfunding campaigns.
Business Plan
A business plan is a document that outlines the goals, strategies, and financial projections of a project or venture, often required for equity crowdfunding campaigns.
C
Campaign
A crowdfunding campaign is a project or venture that is seeking funding through a crowdfunding platform.
Campaign Update
A campaign update is a communication or announcement made by a project creator to inform backers about the progress, challenges, or new developments of a crowdfunding campaign.
Campaign Video
A campaign video is a video created by a project creator to showcase their project, explain its purpose, and encourage backers to support it.
Community
Community refers to the group of backers, supporters, and stakeholders who are involved and interested in a crowdfunding campaign or project.
Community Building
Community building is the process of nurturing and growing a community of backers, supporters, and stakeholders around a crowdfunding campaign or project, often through active engagement, communication, and relationship-building activities.
Conversion Funnel
A conversion funnel is a visual representation of the steps or stages that a visitor goes through before becoming a backer in a crowdfunding campaign.
Conversion Optimization
Conversion optimization is the process of improving the effectiveness and success rate of a crowdfunding campaign in converting visitors or viewers into backers.
Conversion Rate
Conversion rate is the percentage of website visitors or campaign viewers who become backers and contribute to a crowdfunding campaign.
Conversion Rate Optimization (Cro)
Conversion rate optimization (CRO) is the process of systematically improving the elements of a crowdfunding campaign, such as the campaign page, reward structure, or promotional materials, in order to maximize the percentage of visitors who become backers.
Convertible Note
A convertible note is a form of investment in which the investor loans money to a project and has the option to convert that loan into equity at a later date.
Crowdfunding
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people.
Crowdfunding Consultant
A crowdfunding consultant is an individual or firm that provides expert advice, guidance, and support to project creators in planning, launching, and managing successful crowdfunding campaigns.
Crowdfunding Platform Fee
A crowdfunding platform fee is the percentage or fixed amount charged by a platform for hosting and facilitating a crowdfunding campaign.
Cybersecurity
Cybersecurity is the practice of protecting computers, servers, networks, and data from digital attacks, unauthorized access, and other online threats to maintain the confidentiality, integrity, and availability of information.
D
Data Analytics
Data analytics is the process of collecting, analyzing, and interpreting large amounts of data to uncover insights, trends, and patterns that can inform decision-making and improve the performance of a crowdfunding campaign.
Data Privacy
Data privacy refers to the protection and control of personal information and data collected from individuals, ensuring that it is handled securely, used appropriately, and not misused or disclosed without consent.
Data Security
Data security refers to the measures, protocols, and technologies implemented by a crowdfunding platform or project creator to protect the personal and financial information of backers and ensure the confidentiality and integrity of data.
Debt Crowdfunding
Debt crowdfunding is a type of crowdfunding where backers provide a loan to a project creator, who is then obligated to repay the loan with interest.
Decentralized Finance (Defi)
Decentralized finance (DeFi) refers to the use of blockchain and cryptocurrency technologies to enable financial services, such as lending, borrowing, and investing, without intermediaries or central authorities, potentially revolutionizing the way crowdfunding campaigns are conducted and financed.
Diversification
Diversification refers to spreading investments across different projects or ventures to reduce risk.
Diversity And Inclusion
Diversity and inclusion refers to the principles and practices of creating an inclusive and diverse crowdfunding community that values and respects individuals from different backgrounds, cultures, and perspectives.
Donation-Based Crowdfunding
Donation-based crowdfunding is a type of crowdfunding where backers contribute money to a project without expecting any financial return.
Due Diligence
Due diligence is the process of conducting thorough research, analysis, and investigation of a project, company, or campaign before making a financial commitment as a backer.
E
Early Access
Early access is a special privilege or reward offered to backers in a crowdfunding campaign, granting them access to the project, product, or service before it is publicly available.
Early Bird
An early bird is a backer who supports a campaign during the early stages and receives additional benefits or rewards.
Early Bird Reward
An early bird reward is a special reward offered to backers who pledge early in a crowdfunding campaign, usually with limited quantities.
Early Stage
Early stage refers to the initial phase or early development of a project, often associated with startups and entrepreneurial ventures.
Email Marketing
Email marketing is the practice of sending targeted and personalized emails to a list of subscribers or potential backers to promote a crowdfunding campaign, provide updates, and engage with the audience.
Equity Crowdfunding
Equity crowdfunding is a type of crowdfunding where backers receive shares or ownership in a company in exchange for their financial contribution.
Exit Strategy
An exit strategy is a plan or method by which an investor can exit or realize their investment in a crowdfunding project.
F
Failure Rate
Failure rate is the percentage of crowdfunding campaigns that do not reach their funding goals.
Funding Goal
Funding goal is the specific amount of money that a project creator sets as their target to be raised through a crowdfunding campaign.
Funding Period
Funding period is the duration of time during which a crowdfunding campaign is active and accepting contributions from backers.
G
Gamification
Gamification is the practice of incorporating game elements, such as challenges, levels, and rewards, into a crowdfunding campaign to increase engagement and motivate backers to contribute.
Geographical Expansion
Geographical expansion is the process of expanding the reach and operations of a crowdfunding platform or project creator to new countries or regions, often to tap into new markets and attract a broader range of backers.
I
Incentive
An incentive is a motivating factor or reward offered to backers to encourage them to contribute to a crowdfunding campaign.
Incubator
An incubator is an organization or program that helps startups and entrepreneurs in their early stages by providing mentoring, resources, and support.
Influencer Marketing
Influencer marketing is a promotional strategy that involves partnering with influential individuals or personalities on social media to promote a crowdfunding campaign and reach a wider audience of potential backers.
Initial Coin Offering (Ico)
An initial coin offering (ICO) is a crowdfunding method used primarily by cryptocurrency startups, where investors receive tokens or coins in exchange for their investment.
International Crowdfunding
International crowdfunding refers to crowdfunding campaigns and platforms that operate across different countries and cater to a global audience of backers.
International Rewards
International rewards refer to the non-financial rewards or perks offered to backers outside of the project creator's country of origin in international crowdfunding campaigns.
Investment Crowdfunding
Investment crowdfunding is a type of crowdfunding where backers receive a financial return on their investment, typically in the form of equity or interest.
K
Keep-It-All
Keep-It-All is a crowdfunding model where a project receives all funds that are pledged, regardless of whether the funding goal is reached or not.
L
Landing Page
A landing page is a web page specifically designed to capture the attention and interest of visitors and entice them to take a desired action, such as becoming a backer.
M
Machine Learning (Ml)
Machine Learning (ML) is a subset of AI that focuses on getting machines to learn from data and improve their performance or decision-making without being explicitly programmed.
Market Research
Market research is the process of gathering and analyzing information about potential customers, competitors, and market trends to make informed decisions and improve the chances of a successful crowdfunding campaign.
Marketing
Marketing refers to the activities and strategies used to promote a product, service, or campaign and attract potential backers or customers.
Marketplace Crowdfunding
Marketplace crowdfunding is a type of crowdfunding where backers contribute money to projects or ventures listed on a centralized platform that acts as a marketplace for funding and investment opportunities.
Marketplace Model
Marketplace model refers to the business model of a crowdfunding platform that acts as an intermediary connecting project creators with potential backers and facilitating the exchange of funds for rewards or equity.
Milestone
A milestone is a significant achievement or progress point in a crowdfunding campaign or project.
Mobile Crowdfunding
Mobile crowdfunding refers to the practice of conducting and participating in crowdfunding campaigns through mobile devices, such as smartphones and tablets, using mobile apps or optimized websites.
N
Natural Language Processing (Nlp)
Natural Language Processing (NLP) is a branch of AI that focuses on the interaction between computers and human language, enabling machines to understand, interpret, and generate human language.
Nonprofit Crowdfunding
Nonprofit crowdfunding is a type of crowdfunding where backers contribute money to support charitable or nonprofit organizations and initiatives, often in exchange for non-financial rewards or recognition.
P
Peer-To-Peer Lending
Peer-to-peer lending is a type of crowdfunding where individuals lend money to other individuals or businesses in exchange for interest payments.
Platform
A platform is an online service or website that facilitates the raising of funds and connects project creators with potential backers.
Pledge
A pledge is a commitment made by a backer to contribute a certain amount of money to a crowdfunding campaign.
Post-Campaign
Post-campaign refers to the period of time after a crowdfunding campaign has successfully reached its funding goal or concluded, during which project creators fulfill their promises, deliver rewards, and execute the project or venture.
Post-Campaign Marketing
Post-campaign marketing refers to the strategies and activities carried out after a crowdfunding campaign to maintain engagement and attract new backers or customers.
Pre-Launch
Pre-launch refers to the period of time before a crowdfunding campaign is officially launched, during which project creators may engage in activities to build awareness, attract potential backers, and gather initial support.
Pre-Launch Marketing
Pre-launch marketing involves promoting a crowdfunding campaign before it officially launches to generate anticipation and build a supporter base.
Project Creator
A project creator is an individual or organization that initiates a crowdfunding campaign and is responsible for executing the project or venture.
Promotion
Promotion refers to the activities and efforts made to increase the visibility and awareness of a crowdfunding campaign, often through advertising, public relations, and online promotion.
Prototype
A prototype is an early version or model of a product or project that is used to demonstrate its functionality and features to potential backers.
R
Referral Link
A referral link is a unique URL or code provided to existing backers in a crowdfunding campaign, which they can share with others to track and attribute new backers referred by them.
Referral Program
A referral program is a strategy or incentive system implemented by a project creator to encourage existing backers to refer new backers to their crowdfunding campaign.
Refund Policy
A refund policy is a set of rules and guidelines established by a project creator or crowdfunding platform to outline the circumstances under which backers are eligible for refunds.
Regulation Crowdfunding
Regulation crowdfunding, also known as Title III crowdfunding, refers to the specific rules and regulations governing crowdfunding campaigns under the U.S. Securities and Exchange Commission (SEC).
Regulation Crowdfunding (Reg Cf)
Regulation Crowdfunding (Reg CF) is a set of rules and regulations established by the SEC in the United States that governs equity crowdfunding campaigns and protects investors.
Reliable
Reliable refers to the trustworthiness and dependability of a project creator or crowdfunding platform in fulfilling promises and delivering rewards to backers.
Reward-Based Crowdfunding
Reward-based crowdfunding is a type of crowdfunding where backers contribute money to a project in exchange for a non-financial reward, such as a product or service.
Rewards-Based Crowdfunding
Rewards-based crowdfunding is a type of crowdfunding where backers receive non-financial rewards in return for their financial support.
Risk
Risk refers to the chance or possibility of potential loss or failure associated with a crowdfunding project or investment.
Roi
ROI stands for Return on Investment and refers to the measure of the profitability and financial return on an investment made by a backer in a crowdfunding campaign.
S
Secondary Market
A secondary market is a platform or marketplace where investors can buy and sell crowdfunding securities or investment positions.
Securities And Exchange Commission (Sec)
The Securities and Exchange Commission (SEC) is a regulatory body responsible for enforcing securities laws and protecting investors in the United States.
Securities Crowdfunding
Securities crowdfunding is a type of crowdfunding where backers receive investments, such as stocks or bonds, in exchange for their financial contribution.
Securities-Based Crowdfunding
Securities-based crowdfunding is a type of crowdfunding where backers receive securities, such as stocks or bonds, in exchange for their financial support.
Seed Funding
Seed funding is the initial round of funding or investment that helps launch a startup or project during its early stages.
Smart Contract
A smart contract is a self-executing contract with the terms of the agreement directly written into code, stored and executed on a blockchain.
Smart Contracts
Smart contracts are self-executing contracts with the terms of the agreement written in code, typically powered by blockchain technology, which automatically facilitate, verify, and enforce the transfer of funds or assets in a crowdfunding campaign.
Social Media
Social media refers to online platforms and websites that enable users to create and share content, interact with others, and participate in online communities.
Stretch Goal
A stretch goal is an additional funding target set by a project creator beyond their initial funding goal, often with additional rewards or features.
Success Rate
Success rate is the percentage of crowdfunding campaigns that achieve their funding goals and are considered successful in raising the required funds.
T
Target Audience
Target audience refers to the specific group of individuals or potential backers who are the intended recipients of a crowdfunding campaign's message, product, or service.
Token
A token is a digital asset or unit of value issued or created by a project or organization through a blockchain-based crowdfunding campaign.
Transparent
Transparent refers to the openness and clarity of a project creator or crowdfunding platform in sharing information, progress updates, and financial details with backers.
U
Upsell
Upsell is a sales technique that involves offering additional or upgraded products, services, or rewards to backers who have already made a contribution to a crowdfunding campaign.
V
Venture Capital
Venture capital is a type of financing provided to early-stage or high-growth startups and projects in exchange for equity or ownership.
Video Pitch
A video pitch is a short video presentation in which the project creator explains and promotes their crowdfunding campaign.
Viral Marketing
Viral marketing refers to the strategy of creating and spreading content or campaigns that quickly gain widespread attention and are shared extensively through social media and online platforms.
W
Whitepaper
A whitepaper is a detailed document that outlines a project's goals, technology, and implementation plan, often used in cryptocurrency and blockchain-based crowdfunding campaigns.