Crowdsourced financing (microfinancing through appeals to communities) is an interesting alternative to traditional approaches to financing (angels and vulture capitalists). Sites like Kickstarter and Profounder are early examples of this. Here are the alternatives:
- Donations. People donate money to see something very cool built.
- Pre-customers. People put money into a project to pre-purchase the product or service that we will be built.
- Revenue share. People put money into a project to see it built and to participate in the success of the venture through a revenue share.
All three work well for open source ventures.