A lot of people confuse crowdfunding with crowdsourcing. While they are similar in that they both allow people to primarily leverage mass-community collaboration, they relate to two different things entirely.

So, what’s the key difference?

The short answer:

Crowdfunding is the process of sourcing money or funds from a group or groups of people.

Crowdsourcing is the process of sourcing information or skills or end products from a group or groups of people.

The long answer:

What is crowdfunding?

In a crowdfunding campaign, a person, business, or organization raises a relatively small amount of money from a large group of people. Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and...