Crowdfunding’s Perils, and how to avoid them

Everyone has an opinion on the crowdfunding industry these days: it’s the new thing; it’s over; it’s just getting started, it’s overheated; it’s the future of finance, it’s fundamentally flawed.

The truth is that when it comes to investing in businesses and startups, the critics are partly right: there may be some significant risks for investors. Here’s a look at the types of risks and pitfalls that can most easily ensnare investors and how one could avoid them.

Adverse selection

If you own a promising technology business that needs additional capital to grow, you know where to turn.

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