The executives behind the Kaiser Chiefs and Primal Scream are backing a new website to allow people to buy a stake in the artist.
It could provide musicians with an alternative to large labels and give unsigned acts the chance for much-needed finance.
“Bandstocks” will let the public buy a share in the artist in increments of £10 and once the pot reaches a certain level it will be released to the musician to record an album.
Investors will then get a copy of the album, a credit on the sleeve and a share of the profits.
The site has been four years in development and is backed by manufacturing and distribution company The Vinyl Factory.
Two artists, FrYars and Jersey Budd were the first to sign up.
Budd said: “I had the opportunity to do a deal with a number of record labels but I’m confident about my music and the future of Bandstocks, which seems to be a much more honest and transparent way to release records.”
Creator Andrew Lewis said he hoped the site would attract ten artists in its first year.
The advent of internet downloads has forced the music industry to adapt to new ways of distributing music. Bands like Radiohead and the Charlatons have already launched albums online on a 'pay what you like’ basis.
Steve Pankhurst, the web designer who co-founded Friends Reunited, has also taken a small stake in Bandstocks.
