If you have a creative plan for a new business or career, whether it's making candles or publishing a book, there is a new source of funding you can turn to.

Crowdfunding is a relatively new concept, but it has already helped a lot of businesses and projects get off the ground. It works by allowing people to describe their project and seek small contributions, usually via the Internet. If people think it's interesting, you could soon be receiving investment from all over the world.

Since it was launched in 2009, Kickstarter has become one of the world's most prominent crowdfunding platforms, providing funding and exposure for IT start-ups and artists, and now similar websites are beginning to appear in China.

Demohour, tmeng.cn, jue.so, ditfire.com and dreamore.cn are all domestic crowdfunding websites. People can use the websites to present their creative project or passionate plan, and offer discounts on products, free tickets or other deals to persuade people to invest.

Hitting the target

Smartwallit is one successful case of a domestic firm backed by crowdfunding. First launched in March 2013, the company offers an intelligent device that can keep track of wallets and phones. It received $76,121 in funding from 1,237 backers in May this year, via Kickstarter.

Company founder Hu Junfeng told the Global Times Saturday that Smartwallit had also raised $16,419 via domestic website Demohour.

Hu said Kickstarter and Demohour are great platforms for marketing and popularizing products. Many people had got to know what Smartwallit is by browsing through the introduction at these websites, Hu noted.

"The marketing function of these platforms is what I value most; raising funds is the second step," Hu said, adding that "80 percent of our investors become our customers. They follow our brand and new products. Kickstarter in particular is a good advertising place for creative products, because it attracts a lot of young people, who are open to new things."

More specialized

The current trend among crowdfunding websites is toward greater specialization, with each platform focusing on specific fields. For example, US-based Venturehealth and Watsi are devoted to healthcare, while Chinese crowdfunding platform tmeng.cn specializes in short films.

Yin Chao, co-founder and CEO of tmeng.cn, told the Global Times via e-mail Saturday that their strength lies in their focus on a specific field.

"It's quite simple, as we all need to survive. For one thing, nowadays crowdfunding in China hasn't been accepted by most people. Only by focusing on a specific field and aiming at specific groups can we be more effective," Yin said.

"However, once crowdfunding becomes well-known and more widely accepted, there will be more opportunities for large and comprehensive platforms," Yin noted.

Some people are concerned that by presenting detailed descriptions and pictures of products or project ideas, many original works are likely to be copied.

When asked about how to protect intellectual property, Yin said that creative products are not just about a creative idea. Short films, for instance, need a script and a lot of teamwork, which makes it hard to copy.

Yin also said that tmeng.cn is cooperating with the Internet Copyright Protection Alliance of China, an alliance of 25 companies established to protect Internet copyright. The company also controls access to certain projects, to make sure that only appropriate users can view the details.

VC alternative

One area of uncertainty with crowdfunding is just what kinds of projects qualify, and what the minimum requirements are.

Hu Junfeng of Smartwallit told the Global Times that the threshold for foreign crowdfunding websites is much higher than that of domestic websites. Only 60 percent of projects are accepted by Kickstarter, he noted.

The website's "Best of Kickstarter 2012" list includes an Oscar-nominated movie, Incident in Baghdad, and an open source Geiger counter that measures radiation levels in Japan. Projects on Kickstarter generally involve high quality, partly due to the website's mature and healthy crowdfunding atmosphere and strict filtering system.

Yin Chao said that tmeng.cn is trying to raise its filtering standards, but looser criteria are available for students and charitable projects.

Meanwhile, funding is not the only purpose of crowdfunding. It's also a good way to increase publicity and word of mouth about projects, an area in which traditional funding channels are lacking.

Hu Junfeng said that Smartwallit already had venture capital (VC) funding before it approached Kickstarter.

In March 2013, a US-based fashion apparel start-up company called Everlane launched a crowdfunding project in Canada to help it enter the local market. Within one day, the company received $36,815, but its real goal was to find out about the potential market in Canada.

While crowdfunding does push VC to be more creative, they are still two different things, Gao Jianbin, private equity group Central China leader for PricewaterhouseCoopers, said at a PwC roundtable media conference on November 6.

In the past, VC firms were able to rely on the difference in stock valuations between the primary and secondary markets, Gao said, but now they are having to devote more time and energy to helping manage firms they invest in.

However, crowdfunding is based more on individual investment, while VC firms will continue to operate as larger investors, Gao noted, so the impact from crowdfunding will be moderate.

In May 2013, venture capital firm Incube Ventures set up its own crowdfunding website, VentureHealth, focusing on health and medical technology.

According to a report by the Wall Street Journal in May, it was the first VC firm to have its own crowdfunding website. "It's hard to predict, but [investors] are looking very seriously at this new funding vehicle. They are definitely watching crowdfunding carefully, and are intrigued by its potential," Incube Ventures founder Mir Imran was quoted as saying in the report.