A few years ago, I wrote about an idea I had involving a new form of investment: people. Specifically, young people in need of funds to attend the college of their dreams. You choose a student to support, pay a small percentage of their college tuition, and as soon as they start earning money after college, you receive a share of their earnings.
Recently I learned that there is now a website that implements that idea almost exactly as I stated, with the exception that the people you can support are recent graduates with college loans instead of high school seniors about to enter college. Other than that, the idea is almost identical.
The platform is elegantly called Pave. Here’s their summary of the concept:
Pave brings prospects and backers together through a “participation agreement.” Under the terms of this agreement, a prospect accepts a one-time payment from a backer in exchange for committing to share a small, affordable percentage of earnings over a fixed period of time (e.g., 10 years). As prospects’ earnings increase, their backers share in that success. If earnings fall below 150% of the poverty line for any period of time, the prospect is not responsible for sharing earnings during that time.
From what I can gather on the site, they’re starting off by being highly selective about prospects and backers. This isn’t a free-for-all like my beloved Kickstarter (actually, Kickstarter still curates and approves every single idea). Starting small is probably a really good idea as they nurture the platform to life.
Pave added something that I didn’t consider in my original idea: Backers can not just be financial supporters, but also mentors and networkers for their prospects. After all, they want their prospects to succeed. It makes sense that they’d lend a guiding hand along the way.
I don’t know if any college students read this blog, but if you do, what do you think about this idea? Would you be willing to give up a share of your long-term income in exchange for paying off your student loans today? Would that free you to do something bigger and better than what you feel obligated to do so you can pay off those loans?