Uniform Securities Agent State Law (Series 63) Practice Exam 2025 - Free Series 63 Practice Questions and Study Guide

The definition of crowdfunding in the context of securities offerings refers to a method of raising capital through small contributions from a large number of people, typically via the internet. This approach allows entrepreneurs and startups to gather funds from a wide audience rather than relying on traditional financial institutions or large investors.

Crowdfunding leverages digital platforms to connect creators and investors, making it easier for individuals to contribute even small amounts towards innovative projects or companies. It democratizes the funding process, enabling a diverse range of participants to invest in businesses or causes that resonate with them, while also allowing businesses to access capital that may not be available through conventional routes.

This concept stands in contrast to traditional fundraising models, which might involve government bonds or large private investments, and it is distinct from loans provided by financial institutions. Crowdfunding represents an important evolution in how businesses can finance their ventures and gain support from the general public.