List of contents

  1. What does 'crowdfunding' mean?
  2. Functionality of crowdfunding
  3. Classification of the term "crowdfunding
    1. Crowddonation
    2. Crowdsupporting
    3. Crowdlending
    4. Crowdinvesting
  4. Crowdfunding in Switzerland

What does 'crowdfunding' mean?

The term crowdfunding, which originates from the English-speaking world, is made up of the two terms 'crowd' and 'funding'. Both terms immediately illustrate the idea behind crowdfunding - the financing of a concrete project by a group of people.

Functionality of crowdfunding

With crowdfunding, money is collected via the Internet for a business idea or individual projects (production of a product, marketing, social projects,...). This process usually takes place via so-called crowdfunding platforms.

On the donor side, there is usually a large number of actors who are interested in promoting the crowdfunding project. The borrower can be an individual, a group of persons or a company.

The borrower presents the project to be funded in detail on the crowdfunding platform, often in the form of a short presentation video. In addition, as part of a crowdfunding campaign, it determines the amount to be financed and the period during which the amount must be collected.

If the required amount does not come together within the specified period, the capital already raised will be repaid to the investors.
For this reason, the amount and period should be well thought out and realistically selected in advance. Too high amounts or too short periods increase the risk that the financing will not be realised at all.

Classification of the term "crowdfunding

Crowdfunding can be divided into different variants. The main distinction is made:

  • Donation-based crowdfunding (crowddonation)
  • Reward-based crowdfunding (crowdsupporting)
  • Lending-based crowdfunding (crowdlending)
  • Equity-based crowdfunding (crowd investing)


Crowddonation works exclusively donor based. Consequently, mainly social projects are financed through crowddonation. Donation-based means that the sponsor does not receive any value for his support. It is not unusual for institutions and companies to participate in donor-based crowdfunding in order to strengthen their social image.


When talking about crowdfunding, the principle of crowdsupporting is usually meant. In this model, the donor receives a specific consideration in return for his support amount.
In many cases, recipients are categorised according to the amount of funding provided, according to which a corresponding reward is awarded, usually in direct relation to the crowdfunding project (e.g. the sponsored product itself, a signed album, etc.).

The invested capital is normally not repaid in this form.


Crowdlending (P2P lending) is about granting Personal Loan at LEND. However, these are not allocated institutionally. Instead, crowdlending platforms such as LEND are used to broker borrowers and crowd as lenders.

The loans are repaid in regular instalments plus interest. Crowdlending generally makes it possible to achieve lower interest rates on the borrower side by eliminating the need for institutional lending.


By means of crowdinvesting, numerous players tend to participate in primarily young companies with lower amounts. Here, too, appropriate platforms serve to allocate both interest groups.

If the business develops successfully, the investors receive a profit share, often in the form of a profit share. The main motive for financiers is the hope of an increase in the value of the company or its own shares in the company.

Crowdfunding in Switzerland

Crowdfunding is no longer a secret in Switzerland either. More than 40 platforms are now present on the market and serve the individual segments. The largest Swiss crowdfunding platform is wemakeit, which is aimed at a broad target group.

The crowdfunding market is growing constantly. In 2016, more than CHF 128 million were financed by crowdfunding (2015: CHF 27 million, see IFZ FinTech Study 2018). The majority of these are crowd lending and crowd investing. This development should continue in the coming years.