What are the advantages and disadvantages of financing via the Internet, as Marrone did?

Finding money to finance your small business can be a real challenge. You might look to the traditional avenues, such as using personal funds, tapping the resources of family and friends, or even relying on partners for financial backing. In the mid-1990s, however, a new approach to finding financing has emerged—one that utilizes the networking capability of the Internet.
That’s what Pam Marrone of AgraQuest, Inc., tapped into when she needed additional financing.
Marrone’s Davis, California, company develops and manufactures all-natural pesticides. She needed $2.5 million to pay the research, development, and production costs of two pest-control products. Marrone knew how to find money the old-fashioned way. After all, she had raised $300,000 in startup financing to launch her company. But when she began looking to expand her business’s product line, she decided to experiment with a more direct link to potential investors via the Internet.