New Fund Could Help Finance Your Startup

Young entrepreneurs can apply for funding from Gen Y Capital Partners.

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While jobs remain scarce for any one who's looking, one subset of the population suffers from a jobless rate of almost twice the national average: young people. As of September, 17.4 percent of the youth population aged 16 to 24 was unemployed, according to the Bureau of Labor Statistics.

This high rate of unemployment has lead some members of the business community to advocate abandoning the traditional path to employment. Scott Gerber, author of Never Get a "Real" Job and founder of the Young Entrepreneur Council (YEC), says it's better to become an entrepreneur first and create your own job. The current system is failing America's youth, he says, because of massive amounts of student loan debt and a lack of education about entrepreneurship. The YEC is working with a new investment vehicle called Gen Y Capital Partners that will allow young entrepreneurs to apply for funding for their own businesses. Gerber recently spoke with U.S. News about the YEC and the new program. Excerpts:

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What's your take on the current job market for young people?

America faces a crisis of losing its Millennial generation, and there are a lot of older generations out there that keep saying, "It's not all about young people." … That's a very narrow-minded view of a long-term economic recovery. The bottom line is by this generation getting lost, you're not just losing potentially the job seekers and the job creators that are 20-somethings. You're losing the job creators and the job seekers that potentially are the 30-somethings, 40-somethings, and 50-somethings of tomorrow.

How did you get started in entrepreneurship?

When I was in college I started a business my sophomore year. … I was producing professional projects in the entertainment industry. I was doing very well, and then I made a lot of amateur, stupid mistakes that entrepreneurship education and a peer group would have obviously helped me in not making, basically. I spent too much. I diversified too quickly. I scaled without knowing how to scale—all the different things, which lead me to basically bankrupting the company and only having $700 left to my name upon graduation. At that moment, I made the decision to say I'm not going to listen to my parents, who were saying, "Well, now it's time to validate your college education by getting a 'real job,'" and I decided instead to take all of those hard-learned lessons, all of those failures, and see how can I make my next business a success based on what I've learned. … I found a way to build a business that's still in existence today called SizzleIt that does a very simple service. It produces video sizzle reels for marketing agencies, and now has clients like Proctor & Gamble and Dolby.

It was certainly not easy, but what it taught me was that when push comes to shove, when desperation and necessity take over, people can do amazing things. And what can incentivize them and help them do more amazing things is if they have other people around them, like-minded individuals, that can help push them forward, to act as a brain trust and a mentor group that can push each other to the limits of imagination. That's why ultimately, longer-term I said, "Well, how can I give back because I've been so fortunate as an entrepreneur, how can I help the next generation understand what it's going to take in the new economy to become successful?" And that's why I founded the Young Entrepreneur Council (YEC).

[See The Ranks of the Underemployed Continue to Grow.]

What's the YEC, and what do you advocate for?

We advocate that entrepreneurship should be seen and supported as a viable career option for young people. We're not trying to select winners and losers. All we're trying to say is that we can remove barriers to entry to make entrepreneurship a real option. We believe not only on the government level, but on the private-sector level there are certain things that can be done, innovative partnerships, reforms in the government, and a variety of other things that can happen to really activate this generation that has been so almost let down, if you will, by our predecessors on multiple levels. ... Let's change the mindset of this generation from that of one that thinks you graduate and you must get a "real job" to one that says, "How do I go and create jobs?"