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Entrepreneur-Loan

entrepreneur-loans is the idea of re-appropriating the existing student loan infrastructure for start-ups - to make it easier for them to get to capital especially in the tough beginning years.

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My flatmate Bryan Gibson (who is a PhD candidate at the London School of Economics) and I worked on a proposal for entrepreneur loans.


From student to entrepreneur

Similar to the student loan systems that most countries already have, an entrepreneur loan should provide capital to help a start-up to kick off, especially in regions more neglected by established venture capitalists.

Student loans have a certain threshold until which the money stays interest free, after which interest rates go back up to the market standard (or the ECB rate).

Building on the comments below, the enterpreneur loan could work as an extension of the student loan system to enable people to start their own company right out of school.


Incentives for growth

With the entrepreneur loan this can be a similar time span of 3 years, but the challenge is to create incentives for start-ups to employ additional staff and grow.

One way of achieving this would be to give a bonus for each new employee hired (eg. The interest rate drops by five points for every additional employee).

Another incentive mentioned by Meena Kadri and Tim Hood would be setting a certain profitability threshold before repayment starts.


Who is behind the system?

Similar to student loans this could be a public-private partnership. The public hand could lower the risks for private investors to join in. The enterpreneur loan is kick off money, after which the start-up could become a business customer for the private partner.

Potentially the revenue of the loans used to save the banks which were too big to fail in 2008 could be channeled into these start-ups as a political gesture of the big helping the small.


Back to school

Because starting a company is a hard education of its own right, the system could include uni-credit (ECTS) points, to help students stay in their programs, or other entrepreneurs to start a degree. This would benefit both the start-ups with easy access to education and academic innovation as well as the universities, which get hands on business experience and know-how onto their campus.

How will your concept support web entrepreneurship?

The idea is to lower the borders to kick-off money. And help students directly from college to start their own company by integrating their student loan into the entrepreneur loan.

How could we get started?

Using existing student loan infrastructure, this loan system should be able to integrate seamlessly and work as an extension of the student loan system.

Virtual Team:

Jyotirmaya Mahapatra
Victoria Scarffe
Tim Hood
Meena Kadri
Ashley Jablow
Tyler Paine
Amy Bonsall

Evaluation results

15 evaluations so far

1. How well does this concept address a significant pain point felt by European web start-ups?

This is a major pain point for European start-ups - 73.3%

This is a "nice to have" but not a serious pain point - 20%

I really don't know - 6.7%

2. How novel do you think the concept is?

Never seen it before - very novel! - 26.7%

This is common in some places but not in many parts of Europe - 26.7%

This is not novel but a good iteration - 40%

There are already other solutions out there that address this problem - 6.7%

3. How easy is this concept to implement and maintain?

It could be implemented quickly and easily maintained - 6.7%

It could be implemented quickly but will require regular updates to ensure it is accurate and relevant - 13.3%

It is a big undertaking and would need a lot of support and cooperation from people and organisations to make it happen and to maintain it - 80%

4. What type of organisation is best placed to take this forward?

The European Commission should own this one - 26.7%

This belongs with member state governments (e.g., the UK, Belgium, etc) - 66.7%

This is best being owned by a private company - 0%

This feels like a non-profit - 6.7%

This is a start-up itself! - 0%

5. Overall, how do you feel about this concept?

It rocked my world! - 40%

I liked it but preferred others - 53.3%

It didn’t get me overly excited - 6.7%

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