While firms have obtained outside financing from large numbers of investors on financial
markets for centuries, online crowdfunding platforms have only emerged as a major source
of funding for start-ups and new projects for a decade. The information available to backers
on crowdfunding platforms is generally coarse. This paper surveys the existing literature on the
extent to which crowdfunding harnesses the wisdom of crowds. We discuss two broad categories of
crowdfunding. Reward-based crowdfunding platforms such as Kickstarter, where backers typically
have private and independent valuations, appear to offer environments that may harness the
wisdom of crowds. In contrast, initial coin offerings (ICOs) offering services with network
externalities and security-based platforms with common values appear to exhibit some results
eliciting valuable information, but several results appear to point to informational cascades.