Crowdfunding has grown fast in the last three or four years as a result of two key factors: technological innovation and the financial crisis. While the latter has led to severe constraints on lending by traditional credit providers to the real economy, technological advances facilitate much faster word of mouth spreading of information between those in need of financing and potential funders.

This position paper looks at the crowdfunding categories and activities, the benefits and risks of crowdfunding and the approaches to crowdfunding regulation.