Startup Guides > Crowdfunding vs Venture Capital

It seems like a catchy idea is all an aspiring entrepreneur needs these days in order to raise money on crowdfunding sites like Kickstarter, Indiegogo, and GoFundMe. Do crowds gravitate toward funding bad ideas? Or can crowds make rational funding decisions and, better yet, exceed venture capital investors and banks in identifying promising projects?

The crowd is often thought of as being a group of fools, but it turns out the crowd does consider the quality of projects and outcomes pretty well. One reason crowds might do as well, or even better, at picking promising projects is that they tend to be more diverse and might avoid, for example, some of the gender biases that have long directed the bulk of the venture capital funding to male entrepreneurs. Studies have shown that crowdfunding is actually opening up entrepreneurship and investing to more women...