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Updated (01/21): Invest in people´s education for a return

Individuals or organizations can invest directly in people´s education and earn profit with purpose by helping them succeed.

Photo of Edmilson Rodrigues
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Who is the target audience for your idea and how does it reimagine the cost of college?

The target audience are individuals or organizations that want to have profit with purpose by investing in the students´ education for a return. They might create funds to invest in different individuals with the same strategy (minorities, first generation college students, US Veterans), or they might fund a single person. This reimagines the cost by creating new sources of funding for education. And the student pays back in an "equity like" model, or with simple debt.

Talent is universal, opportunities are not. I am Edmilson Rodrigues, entrepreneur from Recife/Brazil. After passing through the experience of not being able to fund my own educational dream, that was to do a MBA in the US, I made it my life mission to promote the access to responsible loans for education, worldwide. 

The company Education Dream, Inc. is the result of almost two years of validation and refinement. 960 students from different countries applied to receive loans, 7 people were funded totalizing $39,000 in loans. It is a humble begining, but we are growing and looking for partnerships. 

As Peter Diamandis says "The world´s biggest problems are the world´s biggest opportunities". Nowadays, small teams of individuals can change the world. In our case, we are going to use the power of Bitcoin/Blockchain and the ubiquituous access of internet through smartphones to allow every individual in the planet to have access to responsible loans for education. 

Our dream is to live in a world where everybody has access to their educational dreams. Wanna dream with us? Send an email to edmilson@edudream.co or visit www.edudream.co or http://invest.edudream.co/

Update 01/21: We were contacted by a big corporation in Brazil that sells cosmetics through a network of sales women. We are discussing the idea of whitelabelling our plataform for them to invest in the education of them. 

What early, lightweight experiment can you try out in your own community to find out if the idea will meet your expectations?

Check it out www.edudream.co . There you will find 960 people who applied for responsible loans. Take as an example Alma Corado (http://edudream.co/profile?p=928). She is an undocumented immigrant who came to the US as a child (she writes about it here: http://undocumented-unapologetic.tumblr.com/). She does not have access to most traditional loans, and is raising $10,000 to cover her senior year in college. Anyone interested in investing in her dream? Visit the page http://invest.edudream.co/.

What skills, input or guidance from the OpenIDEO community would be most helpful in building out or refining your idea?

If you want to fund a dream, the educational loans range from $5,000 to $10,000, are used to cover directly the costs of tuition and the students sign contracts to pay back either (1) with agreed interest rate and fixed payments or (2) with a fixed percentage of their income over the years. Updated (01/12): We were selected as one of the 100 hotest startups created by Brazilians in the 100 Startups Movement. Update (01/17): One more dream funded. Yay!

This idea emerged from

  • A student collaboration
  • An Individual

Are you interested in the Path to Pitching track we've developed for this challenge?

  • Yes

Evaluation results

14 evaluations so far

1. Does this idea make college more accessible, especially for low income students in the U.S.?

Yes! - 35.7%

To a degree - 50%

Not that I can tell - 14.3%

2. Does this idea think beyond current cost structures of college and activate new sectors or partners?

Yes! - 57.1%

It's attempting to - 28.6%

Not that I can tell - 14.3%

3. How excited are you about this idea?

I'm so excited I just can't hide it! - 35.7%

I'm pretty neutral in my excitement level - 42.9%

I don't feel very excited about this idea. - 21.4%

20 comments

Join the conversation:

Comment
Photo of Paul Cohen
Team

Hi Ed,
Thank you for sharing your idea. I have a couple questions:

1. By tying yourself to a loan in exchange for education, how do you make sure that the borrower (student) isn't chained to the sponsor's financial interest.
1 bis. What is the incentive for creditors? What sort of return are we talking about (sweat equity, etc.)

2. What criteria is used to define “success”. Is a graduate whose able to find a job upon graduation considered successful? What if someone decides they want to change the field of studies halfway through?

3. What if the job is done out of necessity to pay the debts rather than out of a personal pursuit driven by passion ?

4. My concern is on putting pressure on people to find the job because they feel obligated to do so.

5. If the graduates aren’t able to find a job, how does that affect them and the creditor? What insurance do they both have?

Caveat: The nature of Work is under-going a transitional phase, automatization and globalization are constantly shifting the demand/needs for work. What we consider a valuable career today may not be applicable in a couple years.
I am a proponent for promoting education at low-cost with a no-strings-attached.
My concern is that I feel that help, driven by financial incentives, even if out of good intentions, may ultimately fail to accomplish its original intent: helping students to get an education leading to acquire the personal skills.

Lowering the cost of education should be done out of sense of collective responsibility. I think this is one of those situations where we have to Act, rather than consider all possibilities and act only then.
A better analogy would be the decision by the US to fight in Europe during WWII. There were many ways to assess whether the danger was worthwhile or not, but it should not be an action taken out of consideration of options, but rather an act done out of pure necessity.

Photo of Karen Sorensen
Team

Hi Edmilson-- I love this idea. It works really well for international students that don't have access to  debt financing like US residents students do. It really important. I was wondering how do you get the investors? With traditional VC financing, it really is a game of "pass the potato", the ideal end game is usually an acquisition, merger, or IPO, and the money changes several hands in the process. But it seems that the ideal scenario here is the student graduates, and is able to payback the obligation. Does the investor get a % return when they debt is paid back? If so what is the cut?
I noticed you where thinking of corporate donations and your carrot for them is they will increase their talent base. Has this strategy been effective? I think there could be some real motivation for companies--especially technology companies, but this really is untested hypothesis. I would love to hear more how you are reaching out to this group.

Keep up the good work. Karen

Photo of Edmilson Rodrigues
Team

Hi Karen! Thanks for your message. We are currently validating the idea of corporate donnors by doing an individual sales process with key contacts in corporations and by being part of startup competitions. (Who knows the guys at UBS would be interested?). Also, we model the interest rates for a 10% per year ROI. 

Your other comment, about the VC financing model and the "pass the potato" game, it is very true. One of the main objections of people and organization putting money on it is the lack of liquidity. We are thinking about alternatives to help in this regard.

Photo of OpenIDEO
Team

Welcome to the refinement phase Edmilson! We’re excited to hear about how you’ve collaborated with the OpenIDEO community to explore new pathways for EduDream - in particular how you’ve connected with the MPower and Brighter Investment teams during the Ideas phase.

The OpenIDEO community is a place for collaboration and experimentation so we’re looking forward to hearing how you might use the Refinement phase to explore new opportunities and pathways. A helpful first step would be to update your idea post with the latest initiatives your team is working on. e.g. the “stock market” you’ve shared in your other idea post. We’d also love for you to list some of the of the key feedback you’ve collected and the next steps for how you might iterate forward. This would give the OpenIDEO community a better understanding of how we can support your project. In the upcoming weeks of Refinement, we’d love to learn more about what you would like to achieve with this idea and the next steps you might take to get there. For example, you might like to outline the action plans you’re currently experimenting with, the challenges you’ve recently encountered, and the partnerships your team would like to build. Developing a simple creative brief for how the OpenIDEO community might participate in the development of EduDream would be a fantastic way to collaborate with our global community:)

Lastly, here's a useful tip: When you update the content of your post, it'd be helpful to indicate this in your idea title by adding an extension. For example, you can add the extension " - Update: Experience Maps 12/22" to you idea title. This will be a good way to keep people informed about how your idea is progressing! We’re excited to see this idea progress in the next weeks!

Photo of Jeff Fitzmyers
Team

Porter Stansberry talked about this a few years ago - he termed it "MeBay". I am also working on something similar as part of a more integrated system. Basically anyone, can offer shares in themselves, or any event. Investors can sell the shares at any time, and or someday hopefully be paid dividends. I would not use debt at all since that automatically puts people in a hole. I agree with insurance -- the ratio of insurance to funding is likely a very good indicator of the chance of success. 

You might find some of this design useful. http://wp.me/p4neeB-4Y I just copied how evolution works.

Photo of Serge Bukhar
Team

This is a great idea. I've thought about this myself for years, but have never done anything about it being busy with personal career. This is just brainstorming, but in terms of splitting the risk among different investors, I wonder if you've looked at Lender's Club. They have a great model for small loans to random people. 
On the flip side of the spectrum, I wonder if there is some sort of a VC model that could be used here. VCs invest in 100 ideas with the goal that 9 out of 100 ideas pay them back 90 (startups go bankrupt) and 1 out of 100 ideas becomes the golden goose (like google). Applying this to education, what if you could get the person who is getting an education to commit to paying back 10x if they become a multi-millionaire? Not sure if there is something here, but maybe just something to think about.

Photo of OpenIDEO
Team

Congrats on making it to the Refinement Phase Edmilson! In the next few days we'll be sending you additional feedback to help you take this idea forward - so be on the lookout for that. We're looking forward to how this idea will grow!

Photo of Alexandra Alden
Team

Hi Edmilson! Alex here from the Path to Pitching, love your idea! Glad to see you're interested in pitching to our network of accelerators. 

Some feedback to help you develop your idea:
- Creating 'personas' for types of funders could help you hone your outreach strategy. Why are they interested in funding students? What are their behaviors and attitudes? 

- Create a map of hubs that could help you onboard new students. What are the hubs that could help you reach these students? Are they guidance counselors, if so what types of associations do they belong to? Parent associations? Then interview these people and find out the messages that would most appeal to them.

- What would EduDream look like with 1million subscribers?

We'd love to see more of your prototype in action! Could you share testimonials of some users? 

Check out our Human Centered Milestones, they are intended to help you on your Path to Pitching (though you've probably done most of them, we'd love if you could share what you learned): http://bit.ly/1N6hgbQ

Photo of Edmilson Rodrigues
Team

Hi Alexandra, thanks for your comment. The Open Ideo community already added value to our project by introducing us to other companies who are working in the field. 

Answering your questions: 

1. To the present moment, most dreams were funded by (a) company who wanted to reward or invest in the education of their employees, (b) Angel investor who perceived that investing in an entrepreneur´s education is less risky than investing in the company later, because the entrepreneur can try many times over the course of contract, (c) individual with some money on the side pursuing a higher return. 

2. The best referal hubs for students are schools or educational programs which receive students who can not affoard and are not able to help them with current alternatives. So they refer it to us, because if the student is funded, the school is paid upfront. 

3. About the view with 1 million users... I would like to share with you the audio of a new video we are still in the process of creating: https://youtu.be/PamDAL47hjQ . This introduces our vision for the future: A stock market in which people could issue their personal stocks of future earnings in order to raise money to fund their education today. Those stocks would be tradeable, so the investors would have liquidity and could invest with as low as USD$100. There, organizations like MPower, Brighter Investments and others could select students according to their "Investment thesis", and would be Syndicate Leads to the group of investors which they represent.  

This is our vision to create a world where everybody with a smartphone, anywhere in the world, could have access to the credit and guidance to fund their education. Please, what do you think? 

Photo of Dan
Team

Hey Edmilson,

This is a great idea. I just was wondering how this would work for all students. Naturally people that are less likely to yield a higher post-graduate income are going to have a more difficult time finding investors, since the return for investors is likely to be lower. Would different students offer different terms of future incoming rates of returns and is this something that the student themselves will be able to control? 

Photo of Edmilson Rodrigues
Team

Hi @Dan. Thanks for your question. Yes, different people would have different risk/retrun equations and would atract different set of investors. About the terms, the students are the ones who make the offer , and it is up to the financiers to accept it or not. The investor can also do another proposal, but it is a negotiation between both parts.

Photo of Edmilson Rodrigues
Team

Friends, check out our new page for financiers: http://invest.edudream.co/

Photo of Shane Zhao
Team

Thanks for coming out to the OpenIDEO SF Meetup Edmilson! In going forward, it'll be helpful to state which part of your idea is new vs what has already been piloted by you and your team. i.e. how might you use this challenge to develop EduDream in new ways? In addition to subscribing to EduDream, how can the OpenIDEO community help you develop the EduDream model?

Photo of Edmilson Rodrigues
Team

Hi Shane. It was awesome to be part of the SF Meetup.

You know, one of the biggest problems thus far has been to attract more financiers to the site. We have around 910 students who want to receive responsible loans, but have only been able to help 6 of them.

Can the community ideate on how to atract new investors? Does anyone have a contact in the media to make an article about us?

Photo of Shane Zhao
Team

Edmilson, I love the notion of getting the OpenIDEO community to help you ideate on how to attract new investors. It'll be helpful to update your idea post with some proposals. This way the community can provide you with more targeted feedback.

You should also reach to Ruben and his MPower team: https://challenges.openideo.com/challenge/higher-ed/ideas/providing-finance-options-to-those-left-out-by-the-system They have a network of investors that might work well with EduDream

Photo of Patricio Toussaint
Team

Hi Edmilson

I think it is a great idea! I really like the videos and makes it really simple to understand the concept. I have a couple of questions that it could reinforce your idea!

If a student decides to pay it with an interest, once they graduate how much time do they have to start paying their debt?

How do you guarantee the payment of the debt from an investor's perspective? Are they any risks involved for the investors of not receiving their money back?

Would you consider in the platform crowdfunding? Since it could be a case of a very talented student that maybe a couple of investor's would like to invest a higher amount.

Great idea Edmilson!

Photo of Edmilson Rodrigues
Team

Hi Patricio. Thanks for the questions.

1. Thus far, the students have to start paying back in the 1st month after graduating.
2. The student signs promissory notes in the value of the debt, which they rescue when they pay, or they prove they are not making money.
3. Technically, it is an unsecured loan. And the investors get a premium for the risk. However, we are studying creating an insurance in which the investor will at least get his principal back after the period.
4. We are developing a technology in which people will be able to pledge as low as USD$100 to invest in each dream, always with a return. But right now, we are only able to split the dreams between 2~3 investors, most.
5. Would you consider investing in one dream? Check our Renan Prado, a Brazilian entrepreneur who only need more $4750 to go to study at Draper University and create an awesome business in the USA: http://www.edudream.co/dream/v/pubers-no-vale-do-silicio!!-118

Photo of OpenIDEO
Team

Congrats on this being today's Featured Contribution!

Photo of Babar Khan
Team

Hi Edmilson!
Just a curious question, what is your idea of a reasonable profit for the investor in the solution that you offer? And how does it differ from traditional student loans?

Photo of Edmilson Rodrigues
Team

For a lender in the USA and a student in the USA, a reasonable interest rate would be 8% APR (in the case of loan), or 1% of income for 10 years for every $5,000 invested (in the case of equity of future earnings). When they are from two separate countries, there is the exchange rate risk, so historically it has been 15% APR for loans and 3% for every $5,000 invested.