Crowdfunding vs. Venture Funding

From the New York Times' Bits blog:
Crowdfunding and Venture Funding: More Alike Than You Think

Hug wants to raise $34,000 to build an app and sensor band that wraps round your water bottle to track daily hydration. Van Eko is targeting €150,000 (about $200,000) for an eco-friendly electric scooter made of hemp fibers. PetTunes is seeking $196,000 to build a personal music player that optimizes sound frequency for dog and cat ears.

A catchy, even irrelevant idea is seemingly all an aspiring entrepreneur needs these days to raise money on crowdfunding sites like Kickstarter — a point driven home this summer when a Columbus, Ohio, developer, Zack Brown, raised $55,492 to make a potato salad.

Now, researchers are tapping into the growing data on crowdfunding to take stock of the phenomenon. A central question: Do crowds — driven by a herd mentality, crowd euphoria or sheer silliness — gravitate toward funding seemingly irrelevant ideas? Or can crowds make rational funding decisions and, better yet, exceed venture capital investors and other traditional gatekeepers in identifying promising projects?

A recent academic study explored those questions by looking at theater projects on Kickstarter. In that study, researchers tracked 120 theater-related campaigns on Kickstarter between May 2009 and June 2012 that aimed to raise at least $10,000. Researchers also asked 30 professionals, all with experience in evaluating applications for grant-making organizations like the National Endowment for the Arts, to evaluate those same campaigns.

Their findings: Crowds and experts agreed substantially on what makes promising theater. Where crowds and experts disagreed, crowds were generally more willing to fund projects. Yet projects picked only by the crowd were as likely to deliver on budget — and achieve commercial success and positive critical acclaim — as projects favored by experts. The crowd, in effect, picked strong projects that experts might not have recognized.

“The crowd is often thought as being crazy. There was a sense that they would back musicals about Internet cats, and experts would back serious work,”...MORE 

Obviously not familiar with the existentialist musings of Henri, Le Chat Noir.
Here he is in Paw de Deux: