The crowdfunding lexicon

Crowdfunding uses its own terminology. Below is a list of commonly used terms in the crowdfunding process.

The basic crowdfunding lexicon

Backer – a backer is a person who financially supports a project.

Backing – used to describe the act of selecting a reward by committing your money via a pledge. An extended use of this word includes interacting with the project creator.

Crowdfunding campaign – the funding raising campaign, typically conducted via an online platform, such as Kickstarter or JustGiving. A campaign can be successfully funded, unsuccessfully funded, or cancelled.

Funding period – the duration of the crowdfunding campaign.

Pledge – used to describe the amount of money you will be charged if you have backed the project and the project meets its funding goal.

Project creator – a person or company that raises funds for a product / service / charitable cause via a crowdfunding campaign.

Reboot – typically used to describe the second or third posting of the same project on the crowdfunding platform. A reboot indicates that the first project failed to fund, and that the project creators went back to the drawing board to assess the product and campaign.

Reward and sometimes prize – used to describe the product or service you will receive if the project creator can manufacture and ship the product or create the service.

Stretch goals – these are additional funding targets that the project creator defined over and above the initial funding goal. The stretch goals are used to attract backers with the promise of a better quality product or service, provided more funds can be raised.

Social media goals – these are the same as stretch goals, but focus on social media, for example, if there are 1,000 Facebook followers, then the project creator will add in an advanced feature to the product.

Survey – at the end of the funding period, project creators send backers a survey to capture details on what they pledged; in layman’s term, the survey captures the order details.

These are common crowdfunding terms and, as a backer, you need to understand why these terms are used, and the legal implication of these terms.