Getting through college is tough and even more so in a recession. The Consumer Financial Protection Board (CFPB) estimates that Americans are currently carrying $165 billion worth of private student loans and nearly a total of $1.2 trillion worth of student debt.
I recently spoke with Dave Girouard, former president of Google Enterprise and now the founder and CEO of Upstart, a crowdfunding service that helps people who are just starting their careers raise capital from backers in exchange for a small share of their future income.
Upstart provides a way for students not to default on their loans and retire their debts in a timely manner, to invest further on their education, or even to raise seed capital for their startup venture. It creates yet another way for crowdfunding to fill in the gap by getting investors to back not just brilliant business ideas but also the people who could be creating those ideas in the future.
David Drake: Upstart’s concept is selling your future salary income for cash today. Your firm sets the term of five to ten years from the date that earnings commence, with a minimum $30,000 per year threshold, or the timetable can be extended. You also only allow entrepreneurs or individuals to offer up to seven percent of their future earnings in total, with an average ask of $25,000 and an average received of $17,000. These fund raises take 30-90 days, and Upstart manages the collection and investor relations for the investors and the lenders. Is that all correct?
