Crowdfunding vs Crowdsourcing: What’s the Difference?

Are there really differences between crowdfunding and crowdsourcing? You’ve probably heard these two terms more than once. You’ve probably said them out loud a few times too. Maybe even pronounced them correctly, despite how tricky they can be for a Spanish speaker.

Differences between Crowdfunding and Crowdsourcing

But have you ever stopped to think about what really sets crowdfunding and crowdsourcing apart? Are you clear on what each one means? In this post we’ll break it down so that, from now on, your biggest worry is pronouncing these words correctly.

What is Crowdfunding

According to emprendelandia.es, “Crowdfunding, or collective financing, is a very simple cooperation system that allows any project creator (professional or not) to gather a considerable sum of money from many people to support a particular initiative. In exchange for their participation in the project, the co-funders (as the people who back projects are often called) receive non-monetary rewards.

These can range from personalised thank-yous on the creator’s website, to pre-purchasing products or services at a lower price before they launch, and even the chance to apply for jobs.”

In short: a new way to raise funds by leveraging new technologies. Of course, in exchange for a symbolic reward. Does the “long tail” concept ring a bell? Apply it to financing and you’ve got it.

Some of the most popular crowdfunding platforms on the web are:

These are just a few examples; there are loads of platforms out there. Some focus on specific sectors. Others are more general, and some only operate in a particular region. Search, ask around and compare. The one that best fits your needs is the right one for you.

What is Crowdsourcing

As Wikipedia puts it, “it can be translated as distributed open collaboration or open task outsourcing. It involves outsourcing tasks that were traditionally carried out by employees or contractors, handing them over to a large group of people or a community through an open call.”

In other words: the same concept as before, “you can’t do it alone, but with friends you can.” Except this time the exchange is work, not funding.

Here are a few examples:

So, do you already know what your project or idea needs?

If you’ve ever used either of these terms, or come across them just now, it’s almost certainly because you want to launch a venture or you’ve developed an idea or project that needs outside help.

Now that we’ve looked at the differences between crowdfunding and crowdsourcing, we can clearly say that both are great tools to lean on. Tools for any professional who wants to reach new goals and needs some collaborative help. Whether that comes in the form of capital (crowdfunding) or work (crowdsourcing).

No more excuses!