Crowdfunding has become an attractive means for start-ups to acquire the necessary funds for their projects. Moreover, more and more start-ups have become active in the operation of crowdfunding platforms themselves. Whether a start-up operates a crowdfunding platform or aims to collect funds through such a network, both activities may be subject to regulation. Much depends upon the type of crowdfunding. This brief aims to provide digital start-ups with a taxonomy of crowdfunding types. The regulatory environment highly depends upon the type of crowdfunding a start-up is engaged in. For instance, some crowdfunding models may require a start-up to draft a prospectus.
A Crowdfunding Taxonomy for-Start Ups