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by nicholasdrake
4108 days ago
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cool cool. yeah hn is great for a certain type of perspective on the world that it's hard to get elsewhere.. i suppose it's the hacker mentality lol well this is kinda random but my best friend and i are looking to apply to yc, our idea is 'A new asset class: Human capital. By paying for a students university education who in return give back a percentage of their annual income (probably developing world) we allow investors to make long-term bets on specific industries and countries. Anyway our first draft of our yc application is here , it will be great if you can take a look and give some feedback... https://news.ycombinator.com/item?id=9224487 |
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Let’s compare Seldon to the financing structure of Make School (see: https://www.makeschool.com/admissions). It seems to me that your idea has three unique selling points: 1) it can cover the cost of going to any university, 2) % repayments are lower and last much longer and 3) student repayments become a tradable asset class. This has pros and cons. Pros: students have total control about where they want to study, return can be much higher and more kids get an education. Cons: students are incentivized to make expensive choices, education is commoditized, return is much slower (you might not break even for decades) and ‘human capital’ (as an unavoidably opaque financial product) is high risk. I think your biggest obstacle will be overcoming volatility and opacity – you’ll need to prove that the candidates you finance will provide good return on investment. What is it about Seldon that means they can offer a student loan a traditional Chinese bank cannot? Maybe adopt some of the strategies Make School and YCombinator use – a rigorous (and prestigious) application process, guidance, relationship building, sense of community, commercial nouse ect. I wouldn’t sell the idea as a cold-hearted asset class at the start and I certainly would change the name – it undermines the true value of your project. Make human capital a little more…human? Besides, tradable asset classes only really emerge once a financial product is big and established enough to be traded.
Other points: • 2% seems too low? (I’m not a numbers guy) • This business would not work in the UK (~50% of students never pay back the full amount they borrow…so no financial incentive to use Seldon) • Top US schools usually cover all their students financing needs – so not too much of a market there unless you want to grab higher-risk candidates. (MBAs are the BIG exception – probably some good opportunities there). • Highlight who you both are - your past achievements and work (because it’s good). • Take your private contact info off of the website (it’s in the public domain, yo). • I like the basic idea – but you need to be more conscious about the fact you’re dealing with 18 year olds and not, say, crude oil.