Investors must be 'made clear' of crowdfunding risks
"Crowdfunding" - an alternative lending method where companies ask the public for investment online - has been growing in popularity.
Using the system, Scottish beer-maker BrewDog raised more than £1m in 24 hours after it appealed to the general public for funds in exchange for equity.
But financial regulators are concerned that investors could be parting with their cash without being fully aware of the potential pitfalls.
Julia Groves, Chairwoman of the UK Crowdfunding Association told BBC Radio 5 live's Wake Up to Money: "We need to get the balance right between consumer protection... and giving businesses access to those funds they just aren't able to raise through the banks."
21 Aug 2013