Separately, from the viewpoint of start-ups, Withers corporate lawyer Graham Webster said: This is a step in the right direction to give entrepreneurs and start-ups more legitimacy when they go to market through crowdfunding.  As the sector expands and the options proliferate, those asking for money need to be able to demonstrate responsibility.”

“Crowdfunding is viewed as an increasingly viable method of raising finance and we see a lot of interest, in particular in the creative industries where there is often a need to bridge the funding gap between the start-up phase and traditional first round seed funding initiatives,” Webster said.

Responding to growing interest in the crowdfunding model, and because of concerns about investor protection, the Financial Conduct Authority, the UK regulator, has enacted a series of rules. The FCA says in its own guidance: “We believe that consumers looking to invest in crowdfunding offers should take care. Given the typical risks involved, under our regulations, firms are only allowed to promote illiquid securities to particular types of experienced or sophisticated investors, or ordinary investors who confirm that they will not invest more than 10 per cent of their net investable assets in investments sold via investment-based crowdfunding platforms.”

The watchdog doesn’t regulate “donation-based” crowdfunding where people give money to enterprises or organisations whose activities they want to support; nor does it regulate pre-payment or rewards-based crowdfunding where people give money in return for a reward, service or product (such as concert tickets, an innovative product, or a computer game). However, the FCA does regulate loan-based crowdfunding, also known as peer-to-peer lending, where consumers lend money in return for interest payments and a repayment of capital over time, and investment-based crowdfunding: consumers invest directly or indirectly in new or established businesses by buying investments such as shares or debentures.