Crowdfunding can be categorized into 4 types. They are Donation crowdfunding, Reward crowdfunding (non-equity based crowdfunding), Debt crowdfunding and investment based crowdfunding (Equity crowdfunding).
1. Donation crowdfunding: In this type of crowdfunding, people donate for social cause or a specific cause without expectations of getting anything in return.
2. Reward crowdfunding: Rewards such as coupons, t-shirts, movie tickets are given to investors in return for the money invested by them.
3. Debt crowdfunding: Here inestors expect the business to return money with interest. It is just like borrowing money from bank.
4. Investment based crowdfunding: Investors invest money in return for stakes/ shares in business.