Upstart is Giving College Grads the Financial Freedom to be Entrepreneurs
For many college grads, the idea of landing a job seems like an unreachable fantasy. For others, taking a 9-5 corporate gig is about as enticing as folding laundry on a Saturday, yet most have no other choice but to start generating income to pay down hefty school loans. And while most of these kids barely have enough money to replace their crapped out iPhone batteries, our leaders are telling them to start their own companies and lead the U.S. as innovative entrepreneurs.
Dave Girouard saw the obstacles many talented graduates faced during his 8-year stint at Google as an executive. After interviewing hundreds of kids who truly had the “stuff” to create ingenius products, Girouard realized the only thing holding them back was money (or the lack of, that is).
He spent some time researching the issues many of these Millennials were facing to see if it was a widespread problem, and found that 54 percent of recent grads wanted to start their own company, yet two-thirds of all grads had an average of more than $23,000 in student loans. Girouard also found that overthe last couple of decades 65 percent of job growth had come from businesses with less than 500 employees, and that in 2011, there was minimal job growth in large businesses — leaving the pool of jobs for newcomers virtually empty.
Inspired by his findings, Girouard created Upstart, a crowdfunding platform to help aspiring twenty-somethings with the necessary skills, talent and commitment, raise capital and find mentors that can help them become successful entrepreneurs. Here’s how it works: applicants create a profile outlining their achievements and goals, then using income statistics, Upstart calculates the dollar amount that can be raised per one percent of the applicant’s income. The applicant then chooses how much money to raise and what percentage of his/her income to share (up to 7 percent is permitted).
Once approved, graduates review backers who can provide funding in increments of $1,000, which they can use to pay off student loans, intern, freelance, or build a business by agreeing to contribute a small share of their income over 10 years. (There is no repayment during years when income is less than $30,000.)
“We want to give young people access to capital and mentorship at a time in their lives when pursuing a passion and taking informed risk makes sense. And we’re really proud of the team we’ve put together to make it happen,” said Girouard.
Four universities — Arizona State University, Dartmouth College, Rhode Island School of Design, University of Michigan and University of Washington — will pilot the program as Upstart continues its plans to expand to other colleges and universities over the coming months and years.
“Success to the team at Upstart would be the creation of one million incremental new businesses in the coming decade,” says Girouard. “By providing a platform designed to eliminate obstacles to entrepreneurship, we want to help a generation of upstarts that create jobs, rather than take them.”
For more information on Upstart’s crowdfunding platform for college grads, check out the video below:
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