What is crowdfunding? What is equity crowdfunding?

“Crowdfunding” as a generic term refers to the aggregation of small payments into one larger pool. Crowdfunding came to popularity with the rise of platforms such as Kickstarter, which allow for individuals to make monetary donations to creative projects in exchange for a reward, which when pooled together, can trigger enough collective capital to make a project possible. As crowdfunding began to be used as a mechanism to collect donations and to pre-sell products, attempts to use it as an equity funding mechanism to allow consumers to invest in startups and private companies have also gotten underway.