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DIY! Entrepreneur loans for young people

Could we create a financial product and a DIY platform that allows young people to start their own businesses?

Photo of Stefan Ritter
9 31

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The Idea
Following up on the Enterpreneur-Loan concept from the last challenge, the idea is to create a financial product designed to help young people to start their own business.

Background story
Talking to entrepreneurs at the OpenIDEO trip to the Digital Assembly in Brussels last week, it became clear that it's a start-up's first year that decides over success or failure, and it is also these beginning years that are the hardest to secure financial support. Corporate loans do not apply for start-ups, and VCs (VC = Venture Capital - see tend to have a list of points (like number of users reached, products already sold etc.) that a start-up needs to achieve first before being able to secure VC funding. Although this situation is understandable due to the risks involved, it creates a culture of low failure tolerance and thus prevents ideas from getting implemented. The DIY loan could put VCs under pressure and create a new dynamic in start-up funding.

Value Proposition
To make the DIY Entrepreneur Loans a win-win partnership, the bank could contribute by allowing for a lower profit margin than with usual loans, in return the young people starting their own businesses could contribute their social media know how to the bank's communications departments - helping them to stay on top of the web 2.0 generations and understand their fast paced needs and habits.
Next generation young people are the early adapters and extreme users of any new social media and web platform (for a definition of an extreme user please see and thus ideal advisers for banks wanting to keep up.

Lowering the Risks
Other loans for young people, like student loans, often have a co-signer (typically the parents) to lower the risk of a default for the bank in return for their investment in someone young at the beginning of their career. The DIY Entrepreneur Loans  could adopt a similar procedure to lower the risks for the financial institution.

Other ideas from the entrepreneur-loan concept, like growth incentives and back to school credits could be part of this concept as well.

Crowd funding
Another option would be to combine the DIY platform with a crowd funding system, similar to kickstarter. Instead of the bank taking all the initial risk, it could step in, after the initial crowd funding was successful. Kickstarter is only available in the US, Barclays is already an established global institution. Potentially Barclays could team up with kickstarter to bring crowd funding and a DIY platform to the rest of the world?

How will your concept support young people as they transition into the world of work?

It will create a new mindset of motivation and possibilities by affirming young people to develop their ideas and create viable business models.

What online or in-person components of your concept will best support this transition?

Barclays could implement an online platform to collect and share the social media contributions from DIY loan holders. This platform could have links to start-up wallet lawmaster (see the last openIDEO challenge: and other sites to help young people get their head around what it means to get an idea off the ground.

My Virtual Team

Charlene Lam Priyanka Kodikal Haiyan Zhang James McBennett Sanyu Karani Cansu Akarsu Amy Bonsall Louise Wilson Karina McElroy James Moyer Tom Hulme


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Photo of James McBennett

Let's raise kids to be entrpreneurs.

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