What is reward-based crowdfunding?

Reward-based crowdfunding is likely the most well known form of crowdfunding options where capital is raised from a group of individuals by offering ‘rewards’ for money ‘pledged’ to the company through a crowdfunding platform.  

If consumers like the idea or product, they can ‘invest’ in the company by providing money in the form of online pledges. Depending on the amount pledged, they will earn something in return, e.g. an honorary mention, exclusive merchandise, access to a pre-sale of the product, a discount for the product, the product itself or a limited edition version of the product.

Reward-based crowdfunding platforms include Kickstarter, Indiegogo, Fundable, Crowdfunder and CrowdSupply.

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