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Crowdfunding is not the same as security token offerings. The classic way to raise funds for a business is to bootstrap it via personal savings or to receive a loan from friends, family, and banks. In recent years, venture capital-based financing has emerged as an additional funding option. In early 2000, crowd-based financing (also known as crowdfunding) caught people's attention. Crowdfunding is a form of crowdsourcing that is often used to raise capital from a large number of individuals for both for-profit and non-profit purposes. The underlying philosophy is to raise money from your community of users and backers, avoiding the complexity of capital markets. For profit-oriented companies, financial returns-based crowdfunding has become quite popular. In this type of crowdfunding, companies usually share an equity-based and debt-based instrument.

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