[wideawake]

There's a difference between asking someone to invest in a venture and asking someone for a handout.

Crowdfunding often blurs the line.

[The_Reader_David]

Actually, under American securities law (thanks Sarbanes-Oxley) it is nearly impossible to use the crowdfunding method to raise actual investment capital. In Europe there are crowdfunding investment methods in which those who put money into a project get an equity stake.

In the U.S. there is no blurred line: crowdfunding is asking for a handout on the basis that it will be used for some purpose on the expectation that donors will find the purpose worthwhile (e.g. keeping FreeRepublic’s servers up and running, defending them against hacking,... the quarterly FReepathon is an example of highly successful crowdfunding).