Document Type



Review of Banking & Financial Law




Securities crowdfunding — the sale of unregistered securities to the public over the Internet — has come under attack before it has even begun. Legal scholars in particular have expressed concern that investors will lose any money they invest in crowdfunding companies. Even assuming that this may be true from a purely financial perspective, these critics are missing an important point: Crowdfund investors with negative returns will not simply have lost their money, but rather they will have spent it (at least in part) on nonpecuniary benefits, including entertainment, political expression and community building. These nonfinancial returns of crowdfunding are readily apparent in the donation and reward context, and this sentiment may well carry over to the emergent context of securities crowdfunding where, on top of nonpecuniary benefits, the investors might even earn a financial return.