Introduction to a Crowdfunded Public–Private Partnership Model in the United States

Crowdfunding is a tool to raise capital for a project or venture from individuals (the crowd) through an intermediary online platform. In the United States, the passage of the Jumpstart Our Business Startups Act in 2012 has led to a rapidly changing legislative and regulatory environment that provides the flexibility to use crowdfunding as a financial mechanism for project funding. This flexibility used in public–private partnership (PPP) projects provides the opportunity to engage institutional and individual investors as direct equity investors. This crowd-funded PPP model results in an enhanced version of the current PPP model and creates value beyond just the financing benefits. Because of the novelty of the approach and the potential impact on taxpayers, a comprehensive look at the approach is needed. This paper introduces a crowdfunded PPP model and begins a policy review on the model by using an analysis of strengths, weaknesses, opportunities, and threats (SWOT). This analysis looks through the lenses of various prisms, including SWOT. The strengths are equal investment opportunities, return on equity, enhanced stakeholder support, and increased transparency. The weaknesses are induced complexity, administrative and accounting challenges, third-party confidential information, and social equity. The opportunities are enhanced prioritization and idea exchange. The threats are business failure, potential for fraud, and possible misconceptions. Future research will be needed for further development and study of the implications and implementation of an enhanced PPP model that uses crowdfunding.