MBA entrepreneurs ditch venture capitalists and bank on crowdfunding

Crowdfunding has captivated entrepreneurs. In 2011, $1.5 billion was raised for one million projects, according to the Crowdfunding Industry Report, and crowdfunding platforms raised a further $2.7 billion and successfully funded more than one million campaigns in 2012.

The frenzy shows no signs of abating. In 2013, $5.1 billion in crowdfunding transactions occurred globally, according to Massolution, a crowdfunding research and advisory firm.

The World Bank predicts that the entire industry could reach $300 billion by 2025. Online platforms such as Crowdcube, Kickstarter and Indiegogo offer entrepreneurs a lifeline when balance sheets are squeezed.

MBA graduates see the potential. “Although I tried to look for investors for the initial plan in 2010, I lacked credibility because I came from the construction sector,” said Corrado Accardi, who founded Pizza Rossa Ltd last year.

His start-up raised £440,000 from over 120 Crowdcube investors, setting a record for the largest amount of crowdfunded equity raised for a UK upstart at the time.

Corrado, who studied an MBA at London Business School, will use the cash to open 12 pizza-outlet-franchises in London over the next five years. “But the reality is that when we start franchising, there are no limits,” he added.

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