Crowdfunding: The New Face of Financial Crimes?
Sherry Sessoms, CAMS-FCI
What is crowdfunding? The term itself is very confounding without a doubt and remains a riddle to most and due to its many variations is hard to clearly define. However, for the purpose of this paper, crowdfunding is defined as the demonstration and procedure of raising expansive amounts of cash, funding or financing from numerous people who are interacting via the internet in online consumer communities. It is becoming one of the main avenues for individuals, small businesses and visionaries around the world to raise capital online for various ideas and projects. It has become an alternative to the typical and traditional financing means we’ve known in the past. Customarily, an entrepreneur, per say, would invest months filtering through their own systems, reviewing potential backers, and investing their own energy and cash to get before them. In the past they would have needed to compile their strategy or business plan, complete their marketing research, create their prototypes and then pitch their idea to a limited pool of wealthy people or organizations including banks and various investment firms, truly constraining their options for funding. Today, crowdfunding is regularly conducted by means of internet based registries (websites), also known as “crowdfunding platforms” and is perfectly legal