Sample Solution

• Reward Crowdfunding- refers to the solicitation of funds, wherein investors receive some existing or future tangible reward (such as an existing or future consumer product or a membership rewards scheme) as consideration. Most of the websites which support donation crowdfunding, also enable reward crowdfunding.

Kicktstarter, Rockethub etc. are examples of websites that support such a type of crowdfunding.

• Peer-to-Peer Lending (P2P Lending)- In such a form of lending, an online platform matches lenders/investors with borrowers/issuers in order to provide unsecured loans and the interest rate is determined by the platform. Some Peer-to-Peer platforms arrange loans between individuals, while other platforms pool funds which are then lent to small and medium-sized businesses.

P2P Lending has proven to be a major source of financing for business entities in the recent past. A report by the Open Data Institute in July 2013 found that between October 2010 and May 2013 some 49,000 investors in the UK funded peer-to-peer loans worth more than £378m.

Some of the leading examples from the US are Lending Club, Prosper, etc. and from the UK are Zopa, Funding Circle, etc.

• Equity Crowdfunding- in such a form of crowdfunding, in lieu of funds solicited from investors, equity shares of the company are issued. It refers to fund raising by a business, particula