Is crowdfunding a scam?

By Peter S. Cohan WALL & MAIN,

Every time a new buzz word comes along, it’s human nature for some to use it as an excuse to scam the public.

This comes to mind in considering a fairly recent buzzword — crowdfunding. That’s the word to describe when a company or individual puts a pitch on the Internet and waits for the money to pour in.

Sometimes, these crowdfunding events sound legitimate. Consider the case of Cassie Wessely, 19, of Third Lake, Ill. She used a crowdfunding platform called Go Fund Me to raise $40,000 for her tuition at Vanderbilt University within four days.

Ms. Wessely had a pitch for money that pulled at peoples’ heartstrings very effectively. According to Chicago’s ABC affiliate, she “successfully completed her freshman year at Vanderbilt University despite losing her mother to suicide three weeks before she went off to college and her father losing his job. In dire straits about how she was going to pay for her sophomore year after her financial aid was canceled, the biomedical engineering student got creative: ‘Please help me stay at Vanderbilt University.’ Her goal was $25,000 and 24 hours after sharing her story on the GoFundMe website, she reached it. Four days later, people [had] donated more than $40,000.”

In exchange for their generosity, Ms. Wessely will try to thank everyone who gave and she says she is “planning to pay it forward in her field of study in the medical community.”

In my view, Ms. Wessely’s family tragedies sound terrible, and I am heartened that people responded with such generosity. Nor can I see any reason to doubt the truth of her story — although I am not sure how donors were able to verify its truth before giving her their money.



ForbesHow Crowdfunding Can Supercharge Your Campaign In 2016ForbesThey say that there are about 7.45 billion people living in this world right now. Imagine that if you could get each of these seven-and-a-half billion people to contribute one cent to your project, well, you know what I [...]

How Crowdfunding Has Changed the Startup GameSingularity HubCrowdfunding has become a multi-billion-dollar industry, funneling millions of dollars into thousands of projects. Technology in particular is one of the leading categories on popular fundraising platforms like Kickstarter an [...]

The GuardianCrowdfunding: the new buzzword for academics needing research moneyThe GuardianArchaeologist Dr David Petts, from Durham University, has also used crowdfunding, raising almost £25,000 to fund a project on Lindisfarne, off the Northumberland coast. The dig, in June, led to [...]

Crowdfund InsiderWhen It Comes to Retail Crowdfunding, SAFEty FirstCrowdfund InsiderOn September 22nd, Crowdfund Insider published a post summarizing the arguments presented in our new essay entitled “Crowdfunding and the Not-So-Safe SAFE“ (forthcoming in Virginia Law Review Online). [...]

CNNMoneyDorothy's fading red slippers saved by $300000 in crowdfundingCNNMoneyThe ruby red slippers worn by Judy Garland in the beloved 1939 film "The Wizard of Oz" are set to undergo a major conservation effort following a successful crowdfunding campaign. The Smithson [...]

Airbitz, BitPay, and Wefunder leverage bitcoin and new US ...Brave New CoinEquity crowdfunding platform, Wefunder, recently started accepting bitcoin. On the same day, popular bitcoin mobile wallet provider Airbitz announced the ...and more » [...]

BloombergCouples Desperate For Children Turn to Crowdfunding FertilityBloombergCrowdfunding has become a popular mechanism for many couples who can't afford the high costs of IVF, or adoption and surrogacy. “It's not an easy thing to share publicly,” says Crystal Barrett, 33 [...]

Equities.comEntrepreneurship in the Crowdfunding EraEquities.comBrandon Adams & Greg Rollett are the co-hosts of Ambitious Adventures: Reality TV for Young Entrepreneurs, so they've learned a thing or two about how to start a business. Here, Rollett and Adams talk entrepreneu [...]

Kiplinger Personal FinanceRaise Money for Personal Bills on Crowdfunding SitesKiplinger Personal FinanceWhile crowdfunding is often associated with business start-ups, many people are finding it a fruitful way to raise money for personal needs. Sites such as YouCaring, GoGetFunding, G [...]

AZCentral.comTiny companies lure investors under Arizona crowdfunding lawAZCentral.comInvestors who make bets under the state's one-year-old crowdfunding law certainly have the potential to get in on the ground floor, but they must be patient and might not receive any returns. Th [...]

CFB Finance

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |