Headline, March02, 2014

"' STARTING - THEE - ALL > !!! UP !!! "'

THE NOTION of   "human capital contracts"   -or  "'social financial agreements"', as Oren Bass, co-founder of  Pave, prefers to call them  -may seem creepy.

To many, many many more  it sounds and feels like : !!! indentured servitude !!!

But the notion of acquiring a stake in someone's future earnings is not unprecedented:

In professional poker, for instance, players often raise money from investors who then pocket a chunk of any winnings.

When Matthew Kulp graduated from the Rhode Island School of Design, just over two years ago, he became a part of an intriguing financial experiment:

To help pay back student loans and fund a new design company, Mr Kulp raided $38,500 via Upstart, an American firm that helps youngsters, or "Upstarts", find wealthy investors:

Willing to give them hard cash in return for a stake in their future earnings.

This novel application of crowdfunding promises to be both popular and terribly controversial.

Upstart, which recently raised $6m from venture funds and Silicon Valley types, is not the only outfit promoting equity-like  investments in young students.

Pave, another American start-up, has developed a similar service.

"Career Concept", a German firm, helps students raise money for their studies and Lumni, which focuses on low-income students in countries such as Mexico, Chile and America:
Has already helped almost 2000 youngsters raise cash from individuals and institutions.

Pave and Upstart have developed offerings that are a mix of LinkedIn, a social network for businesspeople, and Kickstarter, a popular crowdfunding site that lets folks invest in new products.

Candidates post gushing profiles of themselves and describe what they intend to do with the money they are after.

Potential investors, who also post profiles, offer cash to individuals who catch their eye.

If they invest, the backers receive a percentage of the person's pre-tax income over a number of years.

Pave and Upstart allow students to choose a percentage of their income to share with investors.

In return, the matchmakers pocket a  silver  of the money raised, as well as
management fee from investors. 

Pave lets  its   ''prospects"   share up to  10%  of their  future  earnings. Upstarts can offer up to  7%  of their income.

Upstart also caps total payback at  five times  the amount raised,  so that if someone  creates  the next  Google:

They don't have to hand over  Croesus-like sums of money to their investors.

"' Both businesses are still in their infancy "'.

The Honour and the Post continues:

With respectful dedication to the Students of the world.See Ya all on !WOW!  -the World Students Society Computers-Internet-Wireless:

"' Truly Precious Beauty Forever "'

Good Night & God Bless!

SAM Daily Times - the Voice of the Voiceless


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