Crowdfunding is when lots of people contribute funds to make something happen. The internet makes the process very efficient. If you have an idea for a project that you think lots of people would support, you create a sort of mini web page on one of the crowdfunding websites like Kickstarter. You explain your project and tell people how you'll reward them for helping fund the project.
Once your campaign starts you tell people about what you're doing and many of them make contributions to your project. After the campaign is over, you then get to work on bringing your project to life and sending rewards out to your supporters.
There are hundreds of crowdfunding websites with a wide variety of characteristics. Using the right crowdfunding website has a big impact on the success or failure of your campaign. The three key aspects of selection are web traffic, rules imposed by the firm, and what happens if you don't reach the financial goal set for your campaign.
In terms of web traffic, Kickstarter generally has far more activity than other crowdfunding websites. This is quite important because many campaigns get over 10% of total revenues from contributors that heard of the campaign because they follow what's happening on Kickstarter. In fact, the benefit of running your campaign on Kickstarter is significant enough that you should probably run your campaign there if you can.
Each firm establishes the rules you must follow to use their system. Kickstarter has more rules than many of their competitors. Your project must fit within one of their 15 categories and it must have a creative aspect to it. There are restrictions on what your campaign project can be and on the rewards that you can provide to your contributors. There are other established crowdfunding websites that are much less restrictive than Kickstarter...but they offer less "foot-traffic".
Policies also differ in how your campaign's financial goal is handled. Some firms require that you meet or exceed your funding goal in order to get any revenues. For example if you're running a Kickstarter campaign with a goal of $25,000 and your campaign ends with $24,000...you get no funding at all. Many of the websites give you whatever you raise in your campaign (less fees) regardless of whether you hit your target. Some websites allow you to choose how the financial goal is to be handled. You should be aware that many supporters prefer the all or nothing method. They don't want to provide you with funding if you won't have enough money to do your project.
Please note that both crowdfunding and crowd funding are commonly used spellings of the term. What is crowd funding? It's the path you've been seeking to get the funding to bring your vision to life.