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7 crowdfunding sites essential for entrepreneurs

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Raising millions from the crowd

With celebrities like Spike Lee and cutting-edge companies such as virtual reality headset maker Oculus VR turning to crowdfunding sites to raise cash, it may look like an easy route to start-up success. Oculus VR was acquired by Facebook for $2 billion in March after raising $2.4 million on Kickstarter.

Researchers at University of California at Berkeley predicted late last year that the U.S. crowdfunding market could rapidly reach $3.98 billion.

But raising money this way is a lot trickier than it seems. "The dirty secret of crowfunding is that it's incredibly hard work," said crowdfunding expert Richard Swart, director of research at the Program for Innovation in Entrepreneurial and Social Finance at the Coleman Fung Institute for Engineering Leadership at UC Berkeley. "In crowdfunding, people behave like herd animals and follow success. If you haven't raised about 30 percent of your money in the first two to three days, the odds are pretty good you won't be successful."

The odds are about to get steeper. Nearly 1,000 crowdfunding sites have popped up since it began taking off about five years ago, according to a World Bank report released in late 2013.

Choosing the right site is essential for success. Here are seven sites worth considering if you need to raise money for a start-up.

By Elaine Pofeldt, Special to CNBC.com
Posted on 16 May 2014

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