INSIGHT ON BUSINESSCROWDFUNDING TAKES OFFThink you have the next big idea but lack the resources to make it happen? Crowdfunding sites might be your best shot. Sites such as Kick-starter, Indiegogo, RocketHub, and Crowdrise have led the growth of crowd-funding from $530 million in 2009 to almost $2.7 billion in 2012, and will reach $5 billion and beyond by the start of 2014. The Internet is the ideal medium for crowdfunding because it allows individuals and organizations in need of funds and investors to reach one another from all over the globe.How do sites like Kickstarter and Indiegogo work? The idea is simple—an inventor, artist, or activist looking to raise money for a cause uses the site to create a page for that project. People can pledge to support the project, but the money actually only changes hands once a project fully reaches its goal. Otherwise, prospective donors lose nothing out of pocket. The sites take a small commission, usually about 5 percent, on com-pleted projects. Active campaigns are placed on the front pages of each site.The applications for crowdfunding are diverse, from art installations, to movies, to politi-cal action projects, to inventions. All you need is an idea that investors believe is worth their money. Crowdfunding is quickly becoming a main-stay in nearly all of these fields. Kickstarter has financed more installation art projects than the National Endowment for the Arts in Washington, and several of the biggest Kickstarter projects to date have been movie projects that have strug-gled to gain traction at Hollywood studios, like the Veronica Mars movie project ($5.7 million) and Zach Braff’s prospective film “Wish I Was Here” (3.1 million). Contributors receive special rewards corresponding to the size of their invest-ment in the project.Protest movements like Occupy Wall Street have also used crowdfunding to great effect, raising funds to distribute newsletters and publish print advertisements in major newspapers. Turkish protesters crowdfunded a full-page ad in the New York Times to raise awareness of their dis-satisfaction with Prime Minister Tayyip Erdogan. They reached their set goal of $53,800 on Indie-gogo with almost a full month to spare, making it the fastest political fundraising campaign in the site’s history. Not every crowdfunding project gets off the ground—Kickstarter reports that only about 44% of its projects have reached their funding goals. Sometimes projects that do get off the ground simply flame out, disappointing all of their inves-tors. Although this is no different than investing in stocks or other equities, Kickstarter has sought to ease investor fears by improving its communica-tion and handling of the risk inherent in the proj-ects hosted on its site. They introduced a section where fundraisers are required to disclose the risks inherent in their project, and for inventions, the site now requires photos of prototype prod-ucts instead of simply drawings, simulations, or renderings.There also is some worry that the lack of privacy involved with donating to crowdfunding sites has a negative effect on the process. In the art world, many artists are concerned that they will make enemies within their industry if they ignore requests for crowdfunding donations, not to mention the possibility of the focus on fund-raising corrupting the artistic process. However,