Entrepreneurs offer their life’s future earnings for an investment

I've thought about a similar idea, but a college.

What if someone founded a college that instead of making people go deep into debt, took, less than 1% of their earnings forever.

It could end up attracting a lot of people planning to be homemakers, or at least those planning to get lower-paying jobs like teaching, but it definitely has potential.

An added bonus would be differentiation/branding. Colleges that aren't near the upper echelon go to a lot of effort just to seem special and get potential students to remember who they are because really they're all more-or-less the same. Having something as unique and appealing-sounding as "we're free! ... in a sense" would make sure that people remember them.

So I moderated this conversation last night and there are a couple of important elements to keep in mind.

1. This is actually happening. Rafe Furst, who is the investor who first put this into action, has actually made this sort of investment in at least 2 (and maybe more now) people. So it's jumping off the page.

2. The Thrust Fund model that this article discusses and that Kjerstin (the girl in question) is working on is slightly different, in that it is more heavily focused on social sector organizations, where the "gain" for investors is even more complex then just making a new type of financial bet.

3. The reason this is coming up for mission related ventures is that there is simply less funding available for social (vs. web) startups, the costs of building a successful organization are often higher, and frankly, the entrepreneurial class is just at an entirely different place than the foundation class that has traditionally been in charge of funding nonprofit ventures.

4. What came out of the conversation last night is that this is not a type of investment that someone would make for a purely financially strategic reason, although Rafe would argue that it's extremely financially strategic in that you get a piece of a rockstar's success, wherever that success comes from.

Instead, most investors that I've seen interested in this (and a couple made commitments on the spot last night) are thinking about this as a new way to combine mentorship and investment.

I'm not trying to discount you with a strawman here (you make a good point), but I'd take issue with the idea that "anything is worth discussing if both parties see the benefit." Here goes my extreme example: Child prostitution. The child makes money to pay for living expenses, the customer relieves his sexual tension. But no one would argue that, despite the benefits to both parties, the downsides of this arrangement vastly outweigh the benefits.

Again, I'm not trying to make a strawman here comparing this investment scheme to child exploitation. But while this scheme may indeed be north of "not even worth discussing," the idea of "selling off" any part of your life is not something to be taken lightly, which I imagine you'd probably agree with.

Heh, not quite.

This would be a normal college and thus would be able to take people who want to go into any field.

The more I think about this the more I think it has potential. All kinds of interesting things could be products of it. For example, the career services department (or whatever they call the unit that helps people find jobs after they graduate) might be substantially better than at most colleges because it's seen as an investment, not just a nice, but nonessential, way to help their students out.