Crowdfunding creates funds for new projects using the Internet and social media. This can help small business projects to obtain the required funds. A project receives small investments from a wide range of individuals through web advertising and social media. Individuals (investors) who have invested in the project can receive incentives such as product discounts, early opportunity to purchase their products, inclusion of their name in the list of contributing founders etc., so they do not buy the share of the company. Crowdfunding avoids having to turn to banks, friends and family to obtain funds. It also avoids giving up partial ownership of your company. Websites like www.rockethub.com, www.peerfunding.com, www.kickstarter.com are some of the examples of crowdfunding. Crowdfunding is mainly useful for new entrepreneurs. It helps them raise funds to support their projects and provides protection to investors from scammers and has proper regulations from the government. This article mainly focuses on how crowdfunding works, different types of crowdfunding platforms, the status of crowdfunding in different countries, and the strengths and weaknesses of crowdfunding. The functioning of crowdfunding is based on collaboration between investors, intermediaries and entrepreneurs. Investors are a large number of ordinary people who can donate small sums of money for ideas they find interesting. The intermediaries are crowdfunding sites. These websites allow investors to put money into the projects they are interested in. These websites connect investors and entrepreneurs. Entrepreneurs are those who ask for funding for their projects. Entrepreneurs publish their project description in a crowdfunding...... middle of paper......can easily be stolen publicly.• It is only Internet-based. The entrepreneur lacks advice. • Startups (financed through crowdfunding) are riskier and the failure rate is very high. Crowdfunding is a valuable and useful tool in today's world. It has many advantages. Weaknesses can be exploited and lead to a better system. References: Colgren, D. (2014) The Rise of Crowdfunding: Social Media, Big Data, Cloud Technologies. , 96(4), 56-57.Salzsieder, L., & Cornell, D.W. (2013) A critical look at the JUMPSTART OUR BUSINESS STARTUPS ACT. , 83, 18-27.Turban, E., & Volonino, L. (2013). A look at the future of computing. Management information technology that promotes sustainable and profitable business growth (9th ed.,). : J. Wiley & Sons. Jegeleviciute, S., & Valanciene, L. (2013) Evaluating crowdfunding: advantages and disadvantages, 18(1), 39-50.