Crowdfunding is a new way of raising capital. The concept is simple: a large number of people (the crowd) fund small amounts of money to accumulate into an investment large enough to finance a project (or a start-up company).

Some famous crowdfunding initiatives are SellaBand and KIVA, but also president Obama used the power of the crowd to fund his election campaign in 2008 and raised 137 million dollar by using crowdfunding!

Also visit weblog Smarter money for more information about crowdfunding.