It refers to the model of raising project funds from netizens in the form of group purchase + pre-order.

Crowdfunding takes advantage of the communication characteristics of the Internet and SNS to allow small businesses, artists or individuals to showcase their creativity to the public, win everyone's attention and support, and then obtain the financial assistance they need.

There are nine main operating models of crowdfunding, namely: 1. Donation model. For more than ten years, NGOs have been using this model to attract donation funds for some specific projects.

Since the NGO will constantly update investors on the latest progress of the project, this type of donor is more willing to participate in the long term and also guarantees multiple donations.

Investors' primary motivation is networking, which is often a good basis for long-term giving relationships.

2. Reward model This business model is used by project owners to raise donations for specific projects and can be rewarded with (usually small) non-monetary rewards.

This return provided by investors has a symbolic value.

They are usually much lower than the amount donated to ensure there is enough money for the project.

3. Pre-sale model If investors are interested in booking and paying in advance, it is feasible to put the new product or service on the Internet and find investors.

If feasible, it replaces traditional market research and proves the validity of market demand while providing working capital.

Investors who are willing to participate in this type of crowdfunding project do so because they want this product or service to come out.

Another reason is so they can get a discount on the selling price.

4. Lending model: A company uses crowdfunding to borrow money from a group of people instead of a bank.

The role of the platform can be diverse.

Some platforms act as middlemen and also repay borrowers.

Other platforms simply act as intermediaries, with borrowers and lenders in direct contact after the transaction is completed.

5. Social borrowing Even if there is no benefit, some platforms may provide loans to social projects.

For example, businesses in developing countries may receive small loans without paying interest.

6. P2P lending Although P2P lending is not necessarily based on goodwill, it is still an interesting new lending and financing model for traditional lending.

It has some features of crowdfunded lending, but the main difference is that borrowers and lenders usually don’t know each other.

In P2P lending, the main motivation of investors is to obtain (higher) returns.

Interest rates are often higher or lower based on risk factors.

Risk calculations are based on financial data and personal guarantees.

7. P2B lending is similar to P2P lending. P2B provides a loan platform for small and medium-sized enterprises.

So far, this form of crowdfunding has attracted government funds, such as the UK government, to co-invest.

8. Equity crowdfunding When a company wants to attract a group of people to invest together, rather than a business angel or individual investment, this financing method is called equity crowdfunding or crowd investment.

Some funders are primarily interested in projects that are consistent with their own values, involve local interests, or create new local jobs.

Others truly understand the market, project, or business and are eager to bring capital and expertise to help the project succeed.

9. Mixed model The mixed model is also more common. Some platforms have tried a mixed model of loans and pre-sales.

A certain percentage of the funds will be used as a loan (which will be returned with interest), and the remaining funds will be used to pre-finance the production of the product or service.

Additionally, for entrepreneurs, there are benefits to hybrid models, or models that mix crowdfunding with other forms of investment.

Extended information: According to the "Equity Crowdfunding Financing Management Measures (Trial)": Article 7: Platform access to equity crowdfunding platforms must meet the following conditions: (1) A company or partnership legally established within the territory of the People's Republic of China

Enterprise; (2) The net assets are not less than 5 million yuan; (3) There are professionals suitable for carrying out private equity crowdfunding financing, and no less than 3 senior managers with more than 3 years of experience in the financial or information technology industry

2 people; (4) Have a legal Internet platform and other technical facilities; (5) Have a complete business management system; (6) Other conditions stipulated by the Securities Association.