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]}