**2. The main crowdfunding business models**

C*rowdfunding* is a flexible and modulable financial tool, suitable for the realization of any entrepreneurial project of artistic, ludic, cultural, sport-related, scientific, and environmental type. There are several types of C*rowdfunding* divided by the scope or in relation to the reward provided for the financers. Massolution [15] pinpoints four main models:


companies that offers company shares to the crowdfunders in exchange for money. This model is used to favor the growth of small companies provided with little financial possibilities that are new to the financial market. In order to face the complexity of the equity procedures, the platforms have introduced two solutions: club and holding. According to the first, the equity web offer is not directed toward the public, but just toward the investors that are members of a closed investment club; the holding, also called cooperative, entails the creation of an investment society with the aim of collecting funds and of serving as an intermediary between the financier and the beneficiary company. Italy, with art. 30 L.D. 179/2012, has been one of the first countries to introduce a consistent regulation on equity crowdfunding deemed to be avant-garde at a European level.

The companies can orientate themselves in the choice of the type of crowdfunding more suitable for them based on the type of activity they carry out, on their life cycle, on their financial needs, and so on as summarized in **Table 1**.


Source: European Commission, *Il Crowdfunding. Cosa è. Una guida per le piccole e medie* imprese, 2015.

**Table 1.** Guide to the choice.

and publicly traded companies have access to. The aim of the Jobs Act is to encourage financ-

C*rowdfunding* is a flexible and modulable financial tool, suitable for the realization of any entrepreneurial project of artistic, ludic, cultural, sport-related, scientific, and environmental type. There are several types of C*rowdfunding* divided by the scope or in relation to the reward

• Donation-based is the base model because it allows to make donations to entities and noprofit organizations to support social causes or charity activities without obtaining any

• Reward-based, which consists in fundraising via Internet in exchange for a compensating equivalent toward the financier who supports a project, receiving in exchange a material good of a value determined according to the amount of the donation [13]. The prizes have a symbolic value and may consist of a recognition, a promotional object realized with the collected money, an autograph, and so on. The reward-based crowdfunding model is particularly appreciated by entrepreneurs and start-ups, since it allows companies to start with orders that are already in the budget and with a guaranteed cash flow, as well as to stimulate the curiosity of consumers regarding their products or innovative services before their launch on the market [16]. This model is used mostly to finance creative and artistic projects and it is at the base of the American platform Kickstarter. The reward-based model is often characterized by the philosophies of "all or nothing" and "take it all": in the first case, if the prearranged fundraising target is not reached, the funds will get back to the crowdfunder or will be invested in other projects; in the second case, all the contributions collected within 90 days will be credited to the crowdfunder, even if the campaign objective is not reached. The takeit-all model is suitable for projects that need a minimum sum to be started and that can be realized even without reaching the goal, or as an integration to other financing modalities. • Lending-based is a system for lending money, through Internet platforms, to consumers or businesses in exchange for interests and capital reimbursement. The financier may directly lend the money to any applicant through the platform (classic model) or via an intermediary who will absorb the overdue risks and will manage any fundraising action (fully brokered model). The loans granted via lending provide an interest rate that is lower than banks' interest rate. This model shows three subspecies: micro-lending, which consists of financial support, granted via an intermediary, in favor of subjects with financial difficulties who cannot rely on bank loans; P2P (peer to peer) which does not consider the presence of an intermediary and the funds are paid directly to the recipient; P2B (person to business) in which the savers lend money without a bank intermediary to small- to medium-sized enterprises or start-ups. • Equity-based crowdfunding is continuously evolving and represents the most recent form of crowdfunding. It is a financial tool for start-ups and innovative small- to medium-sized

ing of small entrepreneurs, which is essential to the relaunch of American economy.

provided for the financers. Massolution [15] pinpoints four main models:

**2. The main crowdfunding business models**

tangible rewards, if only a moral one.

118 Public Management and Administration
