Crowdfunding basics for technical entrepreneurs

The new hot topic for technical entrepreneurs in the last couple of years is crowdfunding, or appealing to average people for help with your startup on the Internet. This is anticipated by many entrepreneurs to be the hot new source of cash, which will replace all the alternatives outlined earlier, especially the slow and mysterious process of current Angel and venture capital investors.

The challenge is that crowdfunding means something different to everyone, and I too have been confused by the different ways the term gets used. So, I have set out here to outline and offer some practical advice on the many different models currently used with the term crowdfunding and crowdsourcing.

The latest equity version of the crowdfunding model was passed into law in early 2012 via the JOBS Act (http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups_Act), and still has no scheduled date for availability in the USA, which is waiting for the rules...