Earlier this year, we were appointed by Funding Circle to help them with very ambitious business plans. It’s an interesting businesses – the best place to find out about the company is on its website, but in a nutshell, the idea is that savers invest in individual businesses rather than saving through banks. Cutting out the middleman means that savers get higher returns and the good feelings that result from helping out small businesses, and businesses are able to borrow at a lower rate than they would if they were to take a loan from a bank. The idea has been extremely successful: in less than a year, Funding Circle has made more than £15 million available to small, creditworthy UK businesses, and paid out an average yield of 8.3% to savers.

However, this isn’t the only successful application of crowd funding, which, in recent years, has proved to be a credible alternative to conventional funding models in today’s tough markets. The idea has spread like wildfire, and a range of companies are now using this idea to link investors with good causes. Some of the most successful examples of this are in the arts world – a great way for artists involved to protect themselves from public sector cuts and maintain a relative degree of independence.

Two excellent examples of this are Africaunsigned.com and artsurge.org. Africa Unsigned is a website dedicated in profiling undiscovered African musicians around the world. Artists who make it through an initial judging stage are given support gain support to help them raise funds for the production, promotion and distribution of their music. US-based artsurge.org, set to launch soon, is based around the idea of “microphilanthropy”, and aims to link promising artists with donors in order to provide artists with the resources they need to bring their projects to life.

Crowd funding is clearly a powerful tool – as evidenced by the millions of pounds lent to small businesses by Funding Circle – so it’ll be interesting to see what happens when other sectors get in on the act too. Crowd-funded invention, anyone?