Crowdfunding for new businesses is new, relatively untested, and built on the suspect premise that strangers should be investors where family, friends, bankers, and venture capitalists may be unwilling. Yet the proponents of crowdfunding—who are largely on the sales side—want to slim the already tissue-thin investor protections.
How should investors view crowdfunding? First, consider the many choices investors now enjoy—stocks, bonds, mutual funds, real estate, and more. None are guaranteed winners. Stocks, at least, represent companies with a history of earnings. They can be purchased and sold in minutes.
