Crowd funding fueling creative projects in China (2)

"I was inspired by the huge success of Kickstarter.com, the most influential crowd funding platform in the U.S. I think Chinese people also need such an opportunity to realize their dreams," said Zhang.

For project initiators, crowd funding websites not only provide an alternative to gather money, but also allow business people to promote their products and gauge market interest.

"Supporters gave us so many wonderful suggestions. One of the ideas we adopted was selling lampshades with bulbs included," said Jiang Zhaoning, a developer of intelligent light bulbs who received crowd funding to the tune of 40,000 yuan.

To Jiang's surprise, several venture capital groups contacted him after Demohour displayed his project.

"Crowd funding websites are effective in promoting products. And they're really cheap!" said Jiang.

Zha Li, founding partner of venture capital (VC) funds "Istartvc" and "Dragonvest Partners" in Shanghai, regards crowd funding as a necessary alternative to existing forms of investing, such as private capital (PE) and VC.

"PE and VC will only go to projects with significant returns. But many creative projects are not supposed to develop into big businesses, and that's where crowd funding fits in," said Zha.

But there are worries about the potential risks that crowd funding faces. Some are concerned that a swindler could use the platforms to raise money for fabricated projects.

"Our team members review the projects very carefully before putting them online. Only about 10 percent of the projects we receive can be displayed on our website," said Zhang.