

Upstart: The Startup is You - mattmcknight
http://launch.upstart.com/

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loceng
"Upstart lets you raise capital in return for a small portion of your future
income. So you can do what you were meant to do."

Hm, I'm able to raise capital without Upstart.. and keep all portions of my
future income.

If your idea is good enough, planned out enough, and presentation is good -
then all you need to do is talk to investors.

I like how they're trying to be clever, though can't currently see how the
service taking future income is justifiable.

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davej
By the way, this is Dave Girouard's new endeavor (he just left the Apps team
at Google):
[https://plus.google.com/u/0/100940716892313727285/posts/jL2g...](https://plus.google.com/u/0/100940716892313727285/posts/jL2gCC864NY)

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JVIDEL
I see how this could work in countries where there are no investors, loans or
any form of financing at all.

But in the US? Unless these guys want to commit business suicide my guess is
they'll only approve individuals with a solid track record (eg: a kid with
high grades) and not just any poor bastard that may never amount to anything.

Problem is _wonder boy_ above will get a scholarship to Stanford, and then
will meet investors who will fund his startup regardless of what the idea is,
so why would he go to upstart which will siphon his revenues away
indefinitely?

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kristianc
I'm wondering what kind of investors would put money into a company which
couldn't raise capital through a conventional route.

The only kind of investment which makes sense in this kind of scenario is one
where the investors actually don't anticipate any return from the product
being invested in itself, but see a cash cow in the form of a share of future
income.

In which case, the comparison with payday lenders doesn't seem that far off.

Edit: The fact that this is encouraging young people in particular to mortgage
their futures makes me feel worse about this.

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projectileboy
Is this different from indentured servitude?

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encoderer
Yes, obviously. While it can be whimsical to compare the two, and while you
could come up with a single definition that is loose enough to describe them
both, they certainly are different.

The analogy breaks when you accept that, then, debtors prison was not meant to
be ironic or figurative. It was a literal prison.

Most importantly, the socioeconomic factors matter. Your comment is almost
offensive to me. I'm an engineer in the bay area. I work for a startup. It's
important to remember that while my colleagues and I aren't full-on rich, we
are very very well off. As an engineer with 5-15 years experience, you have
myriad options to earn between 100-150k. That's the middle of the bell curve.
And it goes up from there with more experience, I just haven't made it that
far yet.

Sure, the bay area is an expensive place to live. But even here, that salary
is more than double the median.

This concept is aimed at engineers. They're not targeting inner-city troubled
young adults. Indentured servitude? Hardly.

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vlad
Just last night, I recalled that a company used to offer student loans in
exchange for a percent of future income based on current major, grades, SAT
scores, etc. some time around the .com crash.

This one is about 10 years old now:

<http://www.lumniusa.net/how-it-works/overview>

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zacharyvoase
Sacrificing future income in exchange for current liquidity is the very
essence of a loan. The only difference is that the return from a loan is
fixed, whereas a _proportion_ of future income represents a variable rate-of-
return, with more risk (when assessed through conventional means) but more
opportunity for reward.

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davemel37
Warren Buffet said in a talk at Columbia that he would gladly pay $100k for
10% of any student in the rooms future earnings, and 50% more if they had
strong communication skills. (during that same talk, a student asked Warren
why he invested in burlington northern, and he replied, "I always wanted a
train set, but my father never bought me one!"

The biggest flaw in this plan is that anyone who took investment is basically
saying they don't believe much in their future value and potential, or are too
lazy to do the math about their future earnings. It's like running a groupon
deal, you are borrowing at an outrageous rate because you are bad at math, and
value money now much more than its worth.

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coenhyde
I think the idea has substance. My Interpretation was that they provide you
with capital and in return for x% of your future revenue (personally). As
opposed to a loan that gets repaid via x% of your income for a period of time.
Like a student loan or payday loan.

I would consider this. But considering the investment would include all future
companies I may start and not just what I intend to do with the funds in the
short term, the terms would have to be much more favourable than if I raised
funds just for a single company.

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evertonfuller
Some more details would be good aside from the basically blank hold page.

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swah
JUST FILL THIS FORM FOR MORE INFORMATION!

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stevear
I am guessing it's going to be a crowd-funding site once crowd-funding is made
legal through the JOBS act.

If it is, contact me.

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angryasian
why would they contact you ?

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stevear
I am in the same field and am interested to see if there is any collaboration
opportunities.

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angryasian
not to be a jerk, but you're just some random guy on an anonymous forum who's
account is 3 days old. They are a well funded company. Not sure what you bring
to the table, but unless you sort of state your expertise to prove your
credibility, I wouldn't hope for much.

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staunch
Getting the numbers right would make this work.

$50-250k investment + 6% of revenue w/10x cap maybe?

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msrpotus
Fascinating idea. How does it actually work?

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philipdlang
Seems like the equivalent of a payday loan for startups?

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msrpotus
I was thinking it would be more akin to student loans, at least in timeframe.
Wonder what crowdsourced payday loans would be like, though.

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aresant
MyRichUncle tried a similar model in ~2001:

"Through this website, investors could provide money to pay for a student’s
undergraduate or graduate degree expenses in exchange for a fixed percentage
of that student’s future income for a set period after graduation."

They're one of my all time favorite startup stories, going from the charter
described above, to trying to be a "white knight" in student lending -
ultimately going public, then going bankrupt spectacuarrly.

Worth the read:

<http://en.wikipedia.org/wiki/MyRichUncle>

Better luck to Upstart!

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vlad
Yes, that was the startup I remember from 10 years ago. I found and skimmed
the same article but didn't find that line. Considering they became one of the
biggest lenders, I would say they're a success story.

Also, a competitor I uncovered from same era is part of the Clinton Global
Initiative and appears to be doing well in four different countries:
<http://lumni.net>

