Figures by Beauhurst, which conducted research on behalf of the Government’s British Business Bank and the Department for Business, Innovation & Skills, have revealed more than a fifth of equity investment in the UK comes from crowdfunding.

In 2011, just two per cent of deals utilised crowdfunding, which rose to five per cent in 2012, 10 per cent in 2013 and 18 per cent last year.

The majority of these deals are worth less than £500,000, while 97 per cent fall under £1m, but the research revealed that it expects the value of these deals to increase over the next few years as crowdfunding becomes a more secure way of getting investment.

Only 13 per cent of small businesses were aware of crowdfunding as an investment option in 2012, but this has risen to 32 per cent over the last two years, showing some vast growth.

Unsurprisingly, London leads the way for companies using crowdfunding in the UK, both in terms of number of deals and amount of investment. 102 London-based companies used crowdfunding to hep raise awareness and funds towards developing their products and services, with the second highest performer the South East, with 25 companies using crowdfunding to boost investment.

Despite fewer companies using crowdfunding in the South West, the deals were more valuable, with the revenues almost matching those of the South East.

Technology and IP-led firms are the most success, the research discovered, with consumer electronics, mobile apps and internet platforms the highest earners.

Julia Groves, chair of the UK Crowdfunding Association, said: “Crowdfunding and peer-to-peer lending are already bringing much-needed innovation and competition in financial services in the UK.

“This not only means more choice for lenders and investors, and access to finance for UK businesses, but it also helps create the diversity needed for long-term stability.”