What is Rewards Based Crowd Funding?

Rewards based crowd funding is a non-equity model for entrepreneurs to raise capital without the legal restrictions of equity campaigns because no ownership is promised or transferred. Instead the entrepreneur usually offers a product or prototype in exchange for donations of capital to fund the campaign. Capital is promised far ahead of delivery to fund the production of the reward or campaign once a goal is met. Typically the donation is not captured until the goal is met or the reward is ready to be produced or shipped. Once the goal is met the future date of delivery is promised. If goals are not met the rewards do not ship and the donation is either not collected or returned to the funder in full.