Crowdfunding, or crowdsourcing, is one of the alternative funding models the government has been promoting for small and medium-sized businesses to try and remove their dependence on bank lending.
It is commonly used by start-ups and involves them asking for investment from members of the public to help them reach their fundraising targets.
One of the world's biggest crowd-funding websites, Kickstarter, launches in the UK today.
Emilie Holmes, an entrepreneur who has signed up, explained to Today business presenter Simon Jack that she needs to raise £10,000 in 25 days.
"It's an all or nothing model, so I have to get all of it to be able get any of it," she added.
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