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Neil Young's music start-up raises over $1 million

Neil Young is venturing in the start-up world with Pono, a portable music player, through the crowdfunding site Kickstarter.

It's not an MP3, Young explained. it's a device that will improve the quality of digitized music, which compresses music into smaller files, lowering sound quality.

Pono instead "plays back exactly what the artist gave you," the musician told CNBC's "Closing Bell" on Wednesday. "Whatever the artist created in the studio is exactly what you hear."

(Read more: Kickstarter funding brings 'Veronica Mars' movie to life)

So far Young's proposal of a device that promises to bring high-quality music is a success, raising almost $2 million in pledges in a day—far more than the $800,000 goal. The Pono project still has 33 days to go on Kickstarter.

And Young says Pono's success will go far.

"I think it's going to succeed because you'll be able to hear it immediately, and young people today are not living in yesterday. They're living in today and tomorrow, and as soon as they realize that there's some better way to listen to their music, they're going to want to hear it so they can tell for themselves," he said.

(Read more: The perfect pitch? Get a handsome man to do it)

Pono, which will retail for $399, will have an online music store, where music will be available for purchase.

By CNBC's Silvana Ordoñez. Follow her on Twitter @newsdumonde

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