= The form Crowdfunding associated with profit sharing which allows distributed funders to obtain equity or shares
Caution: Legislation in most developed countries prevents privately held companies from selling equity or debt to the public, but there are efforts to change this.
See also: Crowdfund Invest
"Unlisted companies can sell their shares to one of two groups:
Friends, family, or others who have a pre-existing relationship to the business owners;
Highly qualified investors who meet either minimum asset holding or minimum income requirements." (http://p2pfoundation.net/Getting_Results_from_Crowds)
Ross Dawson :
"There are currently three ways in which crowdfunding platforms enable the public sale of debt or equity in privately held companies:
Selling debt or equity to a private network
"In many countries, business owners and entrepreneurs can approach an unlimited number of people within their personal network for funding. They can do this as long as the person being offered shares has a pre-existing relationship with the business owner. Some crowdfunding platforms have been launched to manage the process of making investment offers to the business owner’s personal network.
Example: 40Billion.com 
(named after the estimated $40 billion funding gap for startup entrepreneurs in the U.S.)
"Launched in July 2008 to allow entrepreneurs to raise money more easily from their friends and family. 40Billion.com provides a set of online tools to create and manage a fund raising within the owners’ private networks. The business owners state how much capital they require, select the type of funding they need, list their potential investors, and outline their business plan on the 40Billion.com portal. 40Billion.com then invites the potential funders to join the private investment community and manages the process of building the investment.
To date, 40Billion.com has helped U.S. businesses request $45m in funding from their private networks."
- CapAngel (France): www.capangel.com
- Crowdcube (United Kingdom): www.crowdcube.com
- ProFounder (International): www.profounder.com
Selling debt or equity to highly qualified investors
"Selling debt or equity to qualified investors is also possible in many countries. In the U.S., qualified investors are those with either $1 million in assets or personal annual income of $200,000. Business angel networks already match entrepreneurs with potential investors. In many ways a crowd of highly qualified investors is effectively a virtual business angel network.
Example: SeedUps 
SeedUps is a matching engine for entrepreneurs who wish to raise up to £250,000 from high net worth investors. SeedUps was launched in November 2010 and serves British, American, and Irish startups by matching them with potential investors. Entrepreneurs submit a single page opportunity snapshot to the investment portal, which the SeedUps matching engine uses to match entrepreneurs with appropriate investors. SeedUps’ all-or- nothing funding model means that the target investment goal must be achieved within 180 days for the investment to go ahead.
To date, over 800 companies have raised over £21 million from over 340 investors through SeedUps."
- Innovestment (Germany): www.innovestment.de
- ASSOB (Australia): www.assob.com.au
Indirect investment in the business
"This model of funding involves creating a separate vehicle (an investment company) that invests in the underlying business. The investment vehicle could be a pre-existing fund or a specially created company for the investment opportunity that achieves the highest level of interest from the crowd. In this model the funding will often come from the crowd, in a similar way to a managed fund, however the wisdom of the crowd determines which investments to make.
Example: WiSEED 
WiSEED is a platform that lists startup businesses looking for funding. WiSEED investors select the companies that interest them and state how much they are willing to invest in each one (upwards of €100). When a business gets the required commitments from investors, WiSEED creates a dedicated investment vehicle with each investor owning a fraction of this investment vehicle. In effect, the investor becomes a shareholder in the investment vehicle that becomes a shareholder in the target company.
To date, 16 startups have achieved a total of €5.1m in investment through WiSEED." (http://p2pfoundation.net/Getting_Results_from_Crowds)
- VenCorps (Global): www.vencorps.com
- Grow VC (Global): www.growvc.com
In the U.S., from the Wikipedia:
"In February 2011, a group of entrepreneurs banded together and formed 'The Startup Exemption' with the goal to lobby Washington, D.C. to update the U.S. Federal Security Laws and make it legal for entrepreneurs to use crowdfunding to raise a limited amount of early-stage equity-based financing. With the assistance of the Small Business and Entrepreneurship Council (SBEC) they partook in two hearings on Capitol Hill. Their framework was the basis for the Entrepreneur Access to Capital Act (H.R. 2930) introduced by Rep. Patrick McHenry (R-NC) on September 14, 2011. It proposed to greatly reduce restrictions on equity crowdfunding of for-profit businesses then present in state and federal securities laws. On November 3, 2011 the U.S. House of Representatives passed H.R 2930 with a vote 407-17. H.R.2930 was subsequently introduced on the Senate Floor and referred to the United States Senate Committee on Banking, Housing, and Urban Affairs (the "Banking Committee") for further consideration.
Meanwhile, members of the Senate had also been drafting similar legislation with an eye towards adding further investor protections in their proposed equity crowdfunding legislation, as evidenced in the language of the bills that Senators proposed. To that end, the Democratizing Access to Capital Act (S.1791) was sponsored by Senator Scott Brown (R-MA) and introduced in the US Senate on November 2, 2011. S.1791 was substantially the same as H.R.2930, though it lowered caps on the both amount of capital a small business could raise and how much an investor could invest, as compared to the House bill. Shortly thereafter, the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure of 2011, or the CROWDFUND Act (S. 1790) was sponsored by Senator Jeff Merkley (D-OR) and introduced in the U.S. Senate on December 8, 2011. Both bills were referred to the Banking Committee.
This committee held hearings on December 1 and 14 to gather information and testimony on the matter of capital formation for small and mid-size businesses. The hearings related to many bills on the issue that had been raised in the House and Senate that fall. Both hearings, through primarily the December 1st hearing, addressed the matter of equity crowdfunding in detail. Concerns at the time focused primarily on providing the right level of investor protections in the bills to discourage fraud and bad actors. Another concern was the role of state securities regulators in the proposed equity crowdfunding market. On the fraud point advocates for crowdfunding highlighted the transparent nature of the Internet and the regulatory affect of the platforms that would be hosting the stock offerings. Further, they noted the importance of a national standard to govern the industry, as opposed to a patchwork of state by state standards.
Debate continued in the Senate and within the Senate Banking Committee for a few months. Congress' Christmas recess and then other issues arising in the Senate pushed Crowdfunding and small capital formation bills down in the priority list. In February 2012 equity crowdfunding advocates mobilized again to re-energize the movement and push the Senate to act. This got the Senate's attention and a further hearing was held on March 6, 2012 by the Senate Banking Committee to review crowdfunding and other capital formation measures. Around the same time the House packaged 7 of its earlier small business capital formation bills into a single bill (H.R.3606 or the JOBS Act). This package contained the original language from H.R.2930 regarding equity crowdfunding. H.R.3606 passed the House on March 8, 2012. As H.R.3606 primarily just reiterated bills already passed in the House and under consideration in the Senate, its purpose was to reiterate to the Senate that these bills were important and to force them all the be passed or voted down as one.
In mid-March Senator Merkley's office released a heavily revised version of its earlier CROWDFUND Act that took parts from S.1791 and S.1970 and issued the bill as S.2190. This bill had been negotiated with Senator Scott Brown's office and was sponsored with bipartisan support by Senators Merkley, S. Brown, Bennet, and Landrieu. This bill was later added as an amendment to the JOBS Act on March 22, 2012 and the full JOBS Act passed the Senate the same day. The JOBS Act went back to the House for a final vote. President Barack Obama stated in early March that he would pass the JOBS Act as soon as he received it from Congress. On April 5, 2012 he signed the JOBS Act into law.
It may be some time, given the 270 days the SEC has to begin interpreting and administering the new law, before we begin to see the CROWDFUND Act implemented via the Internet. There are several groups competing to become the regulatory authority under the SEC, all doing heavy lobbying in Washington DC." (http://en.wikipedia.org/wiki/Crowd_funding)
"Startup Exemption (www.startupexemption.com), an online advocacy group, has petitioned for a limit to individual investments from unaccredited investors of either $10,000 or 10% of their gross income. They have also requested an allowance of up to $5 million in total investments and elimination of the 500 shareholders or less rule for private companies.
The two ways in which U.S. companies can sell debt or equity without having to be a public company and register with the SEC are raising less than $1 million over a 12 month period from people with whom the business has a “substantial, pre-existing relationship”, and raising only from “sophisticated” investors.
The European Union’s Prospectus Directive means that any offer of shares or bonds to the public in Europe must be made in a prospectus. Start-ups looking to crowdfund need to draft an expensive prospectus, unless they ask for less than €2.5 million within 12 months in amounts over €50,000. Any request without a prospectus must be directed at less than 100 people in each country in Europe or only made to qualified investors." (http://p2pfoundation.net/Getting_Results_from_Crowds)
Update - May 7th, 2012 SEC FAQ on Equity CrowdFunding See: 
- Enviu, a company that used crowdfunding to attract capital., raised €100,000 – making it the largest crowdfunding campaign in the Netherlands. 
- Cameesa: crowdfunding T-shirt design /
- Catwalk Genius: Crowdfunding for fashion 
- Slice the Pie: invest from $1 to $15,000 in albums the company helps produce
- MyBandStock: a “social web community that allows fans the opportunity to ‘buy stock’ in a band,” 
- Equite for Punks: craft beer
- Illinois Equity Crowdfunding
- Crowdfunding Upcoming Nasdaq IPOs
"Other firms are trying to reinvent small-business financing by providing virtual marketplaces where investors and SMEs can come together. In the world of equity capital the pacesetter is a British firm called Crowdcube, which uses the idea of “crowdfunding” to enable lots of investors to buy up small stakes in start-up firms.
Picking winners among entrepreneurs is notoriously difficult. Venture capitalists’ answer is intensive screening by a small team of dedicated investors, followed by hands-on involvement in the business. The Crowdcube model, which is due to come to America if crowdfunding legislation passes, depends on the ability of thousands of members to ferret out the best ideas. The general public cannot match the expertise and commitment of dedicated “angel” investors if a firm gets funded, admits Darren Westlake, Crowdcube’s founder. But it helps to have lots of investors acting as advocates for a start-up firm." (http://www.economist.com/node/21547994?fsrc=scn/tw/te/ar/onthesideoftheangels)
"In 2011 we witnessed the start of equity based crowdfunding. To get insight into the market for equity based crowdfunding, we analysed the market size in 2011, being a modest €10 million. The coming years, we expect equity based crowdfunding to grow exponentially." (http://www.douwenkoren.nl/en/infographic-equity-based-crowdfunding-in-2011/)
"the Entrepreneur Access to Capital Act (HR 2930) aims to achieve. The bill, which Forbes contributor Scott Edward Walker explained in detail here last month, has the support of President Obama and was passed by an overwhelming majority in the House in November, but has been hung up in the Senate ever since. Portfolio.com and Reuters reported on Tuesday that Senate majority leader Harry Reid announced plans to push the legislation forward." 29/2/12 (http://www.forbes.com/sites/techonomy/2012/02/29/crowdfunding-set-to-explode-with-passage-of-entrepreneur-access-to-capital-act/)
"The European Crowdfunding Network has published a whitepaper explaining the state of crowdfunding regulation in the UK, Spain, Italy and Germany. The document explores how all four countries are simultaneously taking their own unique approaches to implementing crowdfunding while clearly learning from one another as they do so.
… only 30% of businesses are using bank loans while some 40% rely on short-term bank credit or overdraft facilities. On the investment side, venture capital, according to industry statistics, invests in less than 5,000 high-growth businesses a year and business angels in around 1,000. Of the millions of SMEs that are not accessing this formal supply of finance, some will be able to benefit from organic growth and profitability, others will be able to smooth income fluctuations – which are normal in seasonal businesses – through supplier credits or factoring, for example.
As a result, a very large number of SMEs, maybe as many as 10 million, rely on their own wealth, their family, friends and fans to invest in growth, support them through economic difficulties or help to purchase new equipment, finance stock and other operational needs. Crowdfunding is proposing to formalise this part of the financial services sector, to make it transparent and therefore accessible, and to combine it with aspects of cocreation and collaborative open innovation." (http://www.crowdfundinsider.com/2013/06/17310-equity-crowdfunding-in-europe-where-it-stands/)
- 2011 overview graphic, http://www.crowdsourcing.org/blog/infographic-equity-based-crowdfunding-in-2011--douwkoren/10047
- Crowdfund Invest ; Startup Exemption for Crowdfunding
- Equity Crowdfunding Platform Reviews http://www.Crowdfunding-website-reviews.com
- National Crowdfunding Association - USA