Ryan Fitzgibbon is aiming to raise $20,000 for Hello Mr., a gay men?s magazine that promises to buck the trend when it comes to gay lifestyle cliches

Ryan Fitzgibbon is seeking funds to publish a gay men's magazine.

GOT a bright business idea but not the start-up cash? It's the reason so many worthwhile - and many more not-so-worthwhile - businesses never get off the ground.

But that's all changing with crowdfunding. Budding entrepreneurs are increasingly turning to websites such as Australian-based Pozible and US-based Kickstarter and Indiegogo to find capital.

Crowdfunding, or crowd-sourced fundraising, is a way of attracting cash for charitable projects or business start-ups. Individuals make pledges of anything from $1 to $1000 to help entrepreneurs reach a cash target. In return, the entrepreneur promises investors something. Depending on the amount pledged, it could be a sample of the product or just a humble thank you.

Ryan Fitzgibbon is aiming to raise $20,000 for Hello Mr., a gay men's magazine.

The idea came while Fitzgibbon was blogging with friends in San Francisco and after visiting Melbourne where he was inspired by the city's artistic community.

"The thing I noticed about Melbourne, because I sort of tried to immerse myself in the culture there and in design communities specifically, was that there was something really exciting going on with the design and the creative scene," he said.

So far Fitzgibbon has raised $10,900 on Kickstarter with the help of 249 backers. But unless the remaining $9100 is pledged in the next eight days, he won't retain any of the funds.

Kickstarter is an "all-or-nothing" crowdfunding platform that delivers the cash only if a project's target is met. Other sites, such as Sponsume, allow entrepreneurs to keep their funds even if they fail to meet their investment target.

Despite the possibility of losing pledged funds, Fitzgibbon said he was drawn to Kickstarter because it was low-risk for both him and investors.

"If you have an idea, and you don't want to invest a ton of your personal funds into developing it straight away, you can test it out and see if it sticks," he said.

"And … as a backer, with the way it's set up, you aren't charged until the project reaches its goal."

As part of his campaign, Fitzgibbon spent $4000 on Hello Mr. promotional material including a video and photography.

The magazine's profile on Kickstarter has also doubled as a promotional vehicle and attracted a growing list of people volunteering to contribute articles.

Brendan Lewis, chairman of entrepreneurs' forum the Churchill Club, said well-prepared media and business plans were essential for crowdfunding success.

"Crowdfunding is a great agenda, is very useful and is evolving quite rapidly," he said. "The level of professionalism is increasing and if you want to start a project, you better have a well-executed campaign, do the media, a video and have a unique proposal."

But Lewis said crowdfunding was not a pot of gold.

"It can be fraught with danger for those who are a bit green," he said. "You have to be careful not to infringe anyone's intellectual property. You have to have a tangible reward for your investors and be aware that the average timeframe for international delivery of those rewards is supposed to be two months, but in reality is eight months."

While crowdfunding lets businesses test the popularity of their product, it also gives copycats the opportunity to launch a similar business and rush it to market.

Chief economist at the Australian Chamber of Commerce and Industry, Greg Evans, said crowdfunding was still new to Australia and remained risky for both investors and entrepreneurs.

But success stories like that of Pebble, a US wristwatch company that sought to raise $US100,000 and wound up making $US10.27 million, will continue to encourage inventors and entrepreneurs.