What Is the Difference between Crowdinvesting and Crowdfunding?
In the media, the terms crowdinvesting and crowdfunding are often used synonymously. Even though both are similar ways of financing, they differ greatly in some aspects. Both refer to financing by the crowd.
What is Crowdfunding?
In the case of traditional crowdfunding, users receive no shares in a start-up but a symbolic return, for instance a CD.
Crowdfunding is (still) more widely known than equity-based crowdfunding. This is simply due to the fact that this phenomenon has existed for a longer time. To be precise, it has always existed.
In the case of crowdfunding, people cooperate to finance a specific project, which is usually charitable or artistic and probably would not have been realized without the crowd. If there is a return in the case of crowdfunding, it is non-monetary. Thus, crowdfunding may be compared to a kind of donation. People help other people realize a project and are motivated by altruism.