Dave Girouard, the former head of Google's enterprise business has taken up a new mission to help college graduates avoid big corporations like Google.
Upstart is a service launched in limited form Wednesday lets university graduates raise money from other people online so that they can start their own businesses, pursue a research project, or chase a personal dream, rather than take a 'safe' job in the corporate world.
"There's this overwhelming desire to not follow the traditional path of bolting yourself to a desk and climbing the corporate ladder," said Upstart founder Girouard.
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But he said too many graduating students have college loans they need to repay and hence prefer to play safe instead of taking chances. However, with the U.S. unemployment rate now in its fourth year above 8 percent, Girouard said it is a good time for those entering the workforce to think outside the box.
Part social network, part crowd-funding service in the style of Kickstarter, Upstart provides an online forum where participants post personal profiles with their background and goals in the hope of attracting at least five financial backers.
The backers - acquaintances, alumni or other accredited investors - provide funding that will typically range between $20,000 and $50,000 in exchange for an agreed share of the graduate's future income over a 10-year period. Upstart determines the portion of future annual income to be shared based on the total sum raised and the person's qualifications, including academic record and field of study.
Girouard noted the funding is different than a loan because there is no guarantee of repayment.
"It's really a contract that has some contingent payments in it," he said.
However, Upstart is not just about providing young people with capital, but to connect them with backers who can act as mentors, Girouard said.
For new graduates setting out on their own, the funding can provide a way to make payments on college loans or take care of living expenses for a year.
The maximum amount of future annual income a borrower can be on the hook for is seven percent and a borrower is never responsible for repaying more than 15 percent of the total sum received. No payments need to be made in years when the borrower's annual income is less than $30,000, according to the company.
The service will initially be available to students and recent graduates of five schools - Dartmouth College, Rhode Island School of Design, Arizona State University, University of Michigan and University of Washington - but Girouard hopes to expand to many more in the first year.