Dave Girouard is the former president of Google Enterprise. Girouard left the search engine company to start Upstart, which helps entrepreneurs receive investments through crowdfunding. Upstart will be working with college graduates in pursuing “a more entrepreneurial path” rather than chasing after corporate America right out the gate.
Girouard points out that large companies spend a lot of money recruiting college graduates, but because of their lack of traditional credit history — the graduates themselves could not “raise $30,000 if their life depended on it” according to TechCrunch.
Upstart allows entrepreneurs to raise personal funding in exchange for a share of their future earnings. When students sign up, they will be asked to create a profile of their goals and achievements. Students will also need to verify their academic credentials. The students will also need to reveal how much that they want to raise. Investors can commit to back a graduate at an amount of their choice with increments of $1,000.
The good news is that if your company becomes really big, it does not mean that you will have to write a massive check to the investor. Payments are capped at a 14.99% annual return.
Some of the schools that are in Upstart’s pilot program include the Rhode Island School of Design, Arizona State University, Dartmouth College, University of Michigan, and University of Washington.
Upstart has raised $1.75 million in seed funding from several former Google employees, Kleiner Perkins, Google Ventures, and Mark Cuban.