Categories: Uncategorized

How about some VC funding for you?

When it comes to raising capital for a new venture entrepreneurs have a tough job selling their (mostly unproven) idea to Angels, crowd, venture capitalists and banks. Every good investor worth his salt would evaluate the potential of the idea, current market scenario and a plethora of other factors before parting with their money. Notice anything missing? Nobody bats an eyelid about the poor guy building the company (unless he/she comes from IITs/IIMs). So instead of selling a product why not sell one self. Or at least that is the idea behind new companies like Upstart and Pave who allow wealthy donors to invest in people rather than their ideas.

So how is this any better?

Well the most important difference is these platforms allow not only entrepreneurs to raise funds to fund their ventures but also helps students to pay their tuition fees while they are still in college in exchange for a certain percentage of their future income. The applicants are not charged during the time where they are not yet employed. This is a big deal at least in US where tuition fees are quite high and leave students in a huge debt by the time they get out of campus. The interest rate to be repaid is calculated based on the university, the course enrolled for, the student’s GPA and other standardized test results. Also in case of Upstart the maximum amount to be repaid is capped at five times the loan amount, so don’t worry about emptying your bank account if you happen to build the next Facebook or Twitter! All that students need to do is create a profile and pitch themselves like a Kickstarter project and hope to get sponsored.

Can this model be applied in India?

  • Sure enough, the main advantage being the cost of education in India is way less than what it is in the US, so an investor need not have a huge bank balance to get going.
  • We Indians take college education very seriously than the US counterparts and for the right reasons. A person who has only completed high school in US may not be judged as much as their Indian counterparts because in India a college education is not only important for a job interview but also for a marriage interview J
  • There are a lot of students who do not complete their college education despite having a good score in the board exams because their families may not be able to support their education or they may not be able to secure bank loans.

What are the problems that this model faces?

  • In India there are many banks that provide education loans at subsidized interest rates so unless donors are able to match that or provide some other assistance such as helping students find a job faster (in turn helping them repay the loans) there may not be much takers.
  • The algorithm used to determine a candidate’s ‘worthiness’ and expected risk in loan repayment will tend to favor the students with higher grades or those from top institutions who may not even require such assistance as much as first time graduate coming from a low-income background. Some ‘desi fine-tuning’ should be able to address this problem.
  • While investors in India are quite vary to invest in off-beat projects, investing in a person based on score generated by an algorithm without knowing zilch might sound preposterous to many!

So tell us what you think of this model of investing in humans and not MVPs and PPTs? Should companies take the plunge and sponsor deserving students to close the perennial talent gap? And if did would it be akin to bonded labor?

Editor’s Note: The article originally appeared here.

Sridhar Rajendran

I am an avid blogger who likes to write about the latest tech news or the aha app that just made my life even awesome. Also a book worm, movie buff and a few other adjectives...

Recent Posts

Your next lover might be a bot: Inside the rise of AI porn

Researchers looked at a million ChatGPT interaction logs and concluded that after creative composition, the most popular…

1 day ago

Talk to me, bot: Why AI therapy is both a hug and a hazard

A recent news informs that some therapists are now secretly using ChatGPT during therapy sessions.…

2 days ago

AI social impact: The great divider or the great equalizer?

The social impact of digitization is palpable even before AI enters the picture. Research shows…

3 days ago

New tech on the block: Data analytics, skilling, digital twin, medtech, streaming, digital content, cloud, cybersecurity, app & no code

The Tech Panda takes a look at recent tech launches. Data Analytics: The Most Scalable…

3 days ago

Game on, India: New online gaming bill levels up growth, brands & global clout

With the Promotion and Regulation of Online Gaming Bill, 2025 now in effect, India’s gaming…

6 days ago

Rethinking Flipper Zero: A Personal Take on UX Improvements

Here are 7 ways to improve the UX of Flipper Zero — making it easier…

1 week ago