Crowd funds

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Crowd funding or crowdfunding (alternately crowd financing, equity crowdfunding, or hyper funding) describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations.[citation needed] Crowd funding occurs for any variety of purposes, from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie or small business or creating free software. Another aspect of crowd funding is tied into the JOBS Act which allows for a wider pool of smaller investors with fewer restrictions. The Act was signed into law by President Obama on April 5, 2012. The SEC is going to have approximately 270 days from the enactment date to set forth specific rules and methods to ensure that funding will actually take place.



In 1997, fans underwrote an entire U.S. tour for the British rock group Marillion and managed to raise $60,000 with donations following a fan based internet campaign. The idea was conceived and managed by the fans before any involvement by the band. Since then Marillion have later used this method with great success as a way to fund the recording and marketing of several albums, Anoraknophobia, Marbles and Happiness Is the Road.

Crowd funding philanthropy

A variety of crowd funding platforms has emerged to allow ordinary web users to support specific philanthropic projects without the need for large amounts of money. Global Giving allows individuals to browse through a selection of small projects proposed by nonprofit organizations worldwide, donating funds to projects of their choice. Microcredit crowd funding platforms such as Kiva (organization) and Wokai facilitate crowd funding of loans managed by microcredit organizations in developing countries. The US-based nonprofit Zidisha offers a new twist on these themes, applying a direct person-to-person lending model to microcredit lending for low-income small business owners in developing countries. Zidisha borrowers who pass a background check may post microloan applications directly on the Zidisha website, specifying proposed credit terms and interest rates. Individual web users in the US and Europe can lend as little as one US dollar, and Zidisha's crowd funding platform allows lenders and borrowers to engage in direct dialogue. Repaid principal and interest is returned to the lenders, who may withdraw the cash or use it to fund new loans.



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