Crowdfunding
Crowdfunding can be donation-based, reward-based, equity-based or lending-based, with very different rights and obligations. A successful campaign may also test demand, but platform fees, marketing, disclosure and delivery commitments matter. Equity models dilute ownership; lending models require repayment under their terms; rewards may create fulfilment obligations. Regulation and investor protections differ by jurisdiction and model. Do not treat all crowdfunding receipts as free finance or assume that reaching a target eliminates product, credit or execution risk.
Worked example
A business raises $80,000 by promising backers a product. It must budget for making and delivering those rewards; the receipts are not equivalent to an unconditional gift or a conventional equity investment.
Common mistake
Treating donation, reward, equity and lending crowdfunding as if contributors always receive the same rights.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Supporting | September 2026–June 2027 |
| ACCA | FM | Direct | September 2026–June 2027 |