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What is crowdfunding?

Crowdfunding is a method of funding a venture or project by raising small amounts of money from a large number of people, typically via the Internet. Crowdfunding platforms such as Kickstarter and Indiegogo allow individuals to solicit funds from a large pool of backers.

There are several types of crowdfunding, including rewards-based crowdfunding (where backers receive a reward such as a product or service in return for their pledge), donation-based crowdfunding (which is essentially a form of charitable giving), and equity crowdfunding (where backers receive shares in the company). For startups, crowdfunding can be a viable alternative or supplement to traditional forms of financing, such as venture capital and bank loans.

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