Crowdfunding

Crowdfunding is the practice of funding a project or venture by raising money from a large number of people, typically via the internet.[1][2] Crowdfunding is a form of crowdsourcing and alternative finance. In 2015, over US$34 billion was raised worldwide by crowdfunding.[3]

Although similar concepts can also be executed through mail-order subscriptions, benefit events, and other methods, the term crowdfunding refers to internet-mediated registries.[4] This modern crowdfunding model is generally based on three types of actors – the project initiator who proposes the idea or project to be funded, individuals or groups who support the idea, and a moderating organization (the "platform") that brings the parties together to launch the idea.[5]

The term crowdfunding was coined in 2006 by entrepreneur and technologist, Michael Sullivan, to differentiate traditional fundraising with the trends of native Internet projects, companies and community efforts to support various kinds of creators. Crowdfunding has been used to fund a wide range of for-profit entrepreneurial ventures such as artistic and creative projects,[6] medical expenses, travel, and community-oriented social entrepreneurship projects.[7] Although crowdfunding has been suggested to be highly linked to sustainability, empirical validation has shown that sustainability plays only a fractional role in crowdfunding.[8] Its use has also been criticized for funding quackery, especially costly and fraudulent cancer treatments.[9][10][11][12]

  1. ^ Goran Calic, "Crowdfunding", The SAGE Encyclopedia of the Internet, 2018
  2. ^ "Definition of Crowdfunding". www.merriam-webster.com. Retrieved October 23, 2017.
  3. ^ "Cambridge Judge Business School: Cambridge Centre for Alternative Finance". Cambridge Judge Business School. Jbs.cam.ac.uk. Retrieved July 24, 2015.
  4. ^ Cite error: The named reference CMF was invoked but never defined (see the help page).
  5. ^ "Crowdfunding: Transforming Customers Into Investors Through Innovative Service Platforms" (PDF). Retrieved February 7, 2013.
  6. ^ Agrawal, Ajay; Catalini, Christian; Goldfarb, Avi (2015). "Crowdfunding: Geography, Social Networks, and the Timing of Investment Decisions". Journal of Economics & Management Strategy. 24 (2): 253–274. doi:10.1111/jems.12093. ISSN 1530-9134. S2CID 154926205.
  7. ^ Gleasure, R., & Feller, J. (2016). Emerging technologies and the democratisation of financial services: A metatriangulation of crowdfunding research. Information and Organization, 26(4), 101–115.
  8. ^ Laurell, Christofer; Sandström, Christian; Suseno, Yuliani (April 2019). "Assessing the interplay between crowdfunding and sustainability in social media". Technological Forecasting and Social Change. 141: 117–127. doi:10.1016/j.techfore.2018.07.015.
  9. ^ Cara, Ed (September 12, 2018). "Crowdfunding Sites Are Putting Money in the Pockets of Cancer Quacks, Report Finds". Gizmodo. Retrieved December 10, 2018.
  10. ^ Newman, Melanie (September 12, 2018). "Is cancer fundraising fuelling quackery?". BMJ. 362: k3829. doi:10.1136/bmj.k3829. ISSN 1756-1833. S2CID 52193362.
  11. ^ "Crowdfunding: The fuel for cancer quackery". Science-Based Medicine. September 17, 2018. Retrieved January 12, 2019.
  12. ^ Mole, Beth (September 20, 2018). "Crowdfunding raises millions for quack cancer remedies, like coffee enemas". Ars Technica. Retrieved January 12, 2019.