My startup’s premise: A Kickstarter where the project is You

Think risk, young man
Think risk, young man
Image: Getty Images / John Moore
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When I graduated from Dartmouth in the late ’80s, there was little talk of startups and the whole notion of entrepreneurship. Sure, the roommate had a business selling bouquets of helium-filled balloons out of our dorm room. But when it came time for graduation, seniors lined up dutifully for the prestigious jobs in management consulting or investment banking. Bill Gates and Michael Dell? Big-time exceptions to the rule.

But now, millennials don’t want what their parents wanted. In fact, a Kauffman Foundation study found that 54% of millennials want to run their own business. And frankly, it’s not a crazy idea. They’re young, they have tons of energy, and they don’t typically have kids or mortgages to worry about. And regardless of their age, they’re not novices about what it takes to succeed—in many cases, they’ve experienced more by their early 20s than I did by the time I was 30. What better time in life to take a calculated risk and pursue a passion while you have the chance.

Yet something is missing. The cost of higher education means that two-thirds of college graduates finish school with massive students loans, carrying an average of $23,000 of debt into their new lives. And unless they live in the rarefied worlds of Palo Alto or Cambridge, it’s hard to find the support system necessary to take a big leap into the unknown world of entrepreneurship, especially with that Wall Street job offer staring them in the face.

When I was at Google, I learned to appreciate the rigor with which we recruited kids out of college. One way or another, we wanted to know who would succeed at Google, and we left nothing to chance. Like everything else at Google, it was a data-driven process. And it worked. Yet at the same time, most of these kids were essentially illiquid. They were bearing the burden of student loans with repayment looming, not creditworthy by traditional standards, and therefore shepherded into the corporate world.

Many decide to take a safer path instead of pursuing what they really want to do. So what’s wrong with this picture?  In the last couple of decades, 65% of job growth has come from businesses with less than 500 employees. And in 2011, there was virtually no job growth in large businesses.

Just like a startup in Silicon Valley, everybody has potential. And if we can reasonably identify and quantify that potential, it can be monetized. Why shouldn’t capable and ambitious grads be able to pull forward some income from their future, with their earning potential serving as collateral?

I founded Upstart because aspiring graduates needed a new way to raise capital and find mentors that can help them get started on a path to success. If you want to be an upstart, we allow you to raise capital in exchange for a small share of your future income. You start by creating a profile telling us about you and your goals. Using a variety of factors, such as major, GPA, and other statistics, we’ve built a predictive model that calculates the dollar amount you can raise per 1% of your income. You can then choose how much money to raise and what percent of your income you’ll share (capped at 7%) for a period of 10 years.

Unlike Kickstarter, which is focused mainly on funding creative projects like short films or comics, for example, Upstart is a way for promising students with ideas and talents of all kinds to raise money. Most other crowd-funding projects are a means for a large group of people to band together and make small investments that collectively are enough to fund a startup company. Upstart is focused on funding individuals with a high level of potential.

As a backer, you can browse student profiles by school, major, and areas of interest. You find students whose future you believe in and want to support. You can back students in increments of $100.

We’re currently accepting students and grads from 30 schools including Arizona State University, Berkeley College, Dartmouth College, Harvard University, New York University, Rhode Island School of Design, Stanford University, University of Michigan, University of Washington, and Yale University. In the near future, we’ll have programs at additional schools.

We’re most excited because upstarts can use the funds to build a business, pay student loans, work to learn, or focus on a craft. It’s really simple: we just want people to do what they are meant to do in their careers to lead more productive, fulfilling lives that can greatly help others too—versus feeling obligated to take the safe, yet potentially limiting or less innovative job offers that come along.

We need to find ways of co-inventing the future by bringing together entrepreneurs, investors, global leaders, and startup champions. We all must all continue to think of ways to maximize the potential of the millennial generation. The global economy needs them to succeed.