Crowdraising

CrowdRaising is the process of offering equity (stock or membership units) or debt instruments under the auspices of the CROWDFUND Act of 2012. Passed by congress and signed into law by President Barak Obama on 5 April 2012, the act loosens restrictions on the number of investors that a business can solicit funds from, loosens the restrictions on "accredited-only" offerings under $1 million, eliminates the requirement of accreditation for certain non-accredited investors, and limits the amounts a non-accredited investor can commit to any single business in a year.
The affect of the Bill is to create an easier flow of money from the middle class and allow them to invest money outside of the structure of the stock exchanges and institutionally-managed mutual funds.
While the Bill refers to "Crowdfunding", the nature of Crowdfunding has been around for the better part of 10 years and has never needed regulation or the passage of legislation to allow for its implementation or participation. Crowdfunding has established itself as a viable means for project and start-ups to gain initial funding for development, and follows the "commitment for reward/recognition" model. The popularity of Crowdfunding is what led certain groups to begin lobbying Congress for passage of the CROWDFUND Act - they saw that people responded to requests for small dollar amounts in return for some type of tangible reward or intangible recognition.
What made Crowdfunding legal was the nature of the reward or recognition. Instead of offering a rate of return or equity holding, these proejcts and companies were able to offer something akin to a retail transaction. So long as the individual committing the funds, regardless of the amount, understood what they were getting in exchange, (so long as it wasn't a definable security or promise of return/participation), they were free to do so; it is simply a contract between two individuals.
Crowdraising is a better term for the opportunity created by the new legislation. "Raising" inherently refers to previously-regulated issuance of securities and creates a clearer understanding of what is being offered. Is the offering "Crowdfunding", with its commitment/reward model, or is the offering "Crowdraising" where stock/units or a promise of return/repayment is expected?
By creating a delineation between the two, it will help not only in interpretation of the new legislation, but reduce confusion and possible legal sanctions in the future.

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