August 10, 2012 · 0 Comments
With the student debt bubble passing the trillion dollar mark, more than a few would-be entrepreneurs have felt the squeeze after graduation.
So many feel pressed to stave off debt, that they take the first job they can get and push their dreams aside in the process. David Girourd, an ex-Google exec, was disturbed by this trend, and decided to do something about it by launching a company called Upstart.
Similar to the way crowdfunding sites like Kickstarter and Indiegogo raise capital for projects, Upstart helps college graduates find backers to fund their vision. Students are closely vetted for academic performance, credit and work ethic, while backers must prove they’re accredited and can foot the bill.
Once a student passes Upstart’s rigorous application process, he or she creates a campaign explaining how much they want to raise, which the backer can view in Upstart’s database. From there, it’s up to backers to decide if they want to take a chance on a bright young mind.
If a student reaches their funding goal, they’re required to have multiple backers and give equity, or a cut of their annual proceeds, to their backers. In this way, students are held accountable for their work and backers have something to show for their investment.
“Not every student participating will have debt,” Girourd tells Your Money, “but they’ll have the money to try something different.”
Another thing that makes Upstart so unique is that it isn’t focused on finding the next Steve Jobs, or even disrupting the tech world.
“We’re trying not to be specific because want to see where the interest comes in the market,” Girourd says. “Tech startups are only a slice of it. We see this creating a range of new businesses.”
The company, which launches in private beta in September, has partnered with five universities across the country to do so. Girourd says each institution—Arizona State, Dartmouth, Rhode Island School of Design, the University of Michigan and the University of Washington—offers a different type of thinker.
“We looked for diversity,” Girourd says of the students at these schools “One (college) is a small private school with high quality students, another is very focused on the arts and design, and the latter offer really strong engineering and computer science programs.”
All schools were alike, however, in that their presidents encouraged their students to find satisfying careers—something that’s hard to do when you’re facing a mountain of debt. More than anything, Girourd says, he hopes that Upstart will create more jobs and even better careers.
“I think this has great potential,” he says. “When discussing what kind of impact we would have if we nailed this, we came to the notion that over a decade, we could create a million new businesses in the U.S.”