When VCs make investments we are told that they are really “investing in people.� Some businesses invest in advanced education for their top employees.
I have always thought it would be interesting if people could invest in other people. Consider this – if a VC is really investing in people, then why are people not investments in and of themselves, rather than simply vehicles to investment? We can now invest in everything from weather derivatives to exotic asset classes. What if you could invest in an entrepreneur, rather than his or her company? Would that person have more incentive to perform? Could the ROI be greater, or the risk diminished?
Recently we have seen a rise in “creative lending,� from micro loans (Kiva) to lending among friends (Facebook Loans) to MyRichUncle, a New York company, offering “human capital� as an investment. MyRichUncle creates mutual funds for investors willing to provide students with funding for college in exchange for a percentage of future earnings. For years, Warren Buffet has auctioned off a luncheon that he will attend and entertain questions at. Author Tim Ferriss is currently auctioning himself off (for a date).
This week I came across a Forbes.com article talking about a charity auction at Harvard Business School where students bid out percentages of future earnings in exchange for philanthropic donations. For example, one student promised 3% of his earnings in 10 years. There other students put 1% shares paid in 10 years on the auction block. I find this sort of human capital marketplace both fascinating and scary.
When people are desperate for money, they will accept deals that are insanely foolish because it’s difficult to think beyond immediate needs and desires. Thus, could such a human marketplace be regulated so that the desperate are not taken advantage of?
Outside of individuals, what could be the role of corporations? Why do colleges like Stanford not bankroll more of their obvious student entrepreneurs? Harvard would certainly being doing even better with a small piece of Facebook or Microsoft. Instead of teens paying for an internship with an investment bank, is there a scenario where an iBank would pay for a teen’s education? If the student left the firm after graduation, there could be an option for equity (percent of salary); a convertible note of sorts.
Is such a marketplace a good idea? Is it viable? Is it ethical?
{ 4 trackbacks }
{ 1 comment… read it below or add one }
Rumors have nike air max 1 been circulating for a while now regarding a 2010 release of the nike air max 2010 Air Jordan X (10) “Chicago,” but we have not seen any sort of confirmation in the form of catalog images or words from Jordan Brand representatives. nike air max 95 But today, we are extremely proud to present a nike air max 90 SneakerFiles exclusive confirmation that the Air Jordan nike air max nl X (10) will drop this month as a quickstrike release. Not just any Air Jordan 10, but rather the Chicago colorway with 45—the number Michael Jordan wore when he came back from retirement—on the ankle. This colorway of the AJ 10 is one of the most popular styles ever created, and will surely result in lines outside stores for days and may even cause riots. The Air Jordan X (10) “Chicago 45″ will release at only 150 sneaker stores across the United States with each retailer only receiving 23 pairs. Be sure to check out the additional photos and information after the jump!