The YEC is an invite-only group of many of America's top young entrepreneurs. Our founders include individuals like Alexis Ohanian [cofounder] of Reddit, the founders of Living Social, and the founders of College Hunks Hauling Junk. Really we've almost covered every single market, vertical, and geographic location in the U.S. Our sole purpose is how do we combat youth unemployment and underemployment by teaching entrepreneurship and by helping to mentor the next generation.
Explain your latest partnership with Gen Y Capital Partners.
While we've been talking to thousands of entrepreneurs and 20-somethings over the last year, we've seen that there have been multiple barriers to entry for young people to enter the non-traditional workforce, the entrepreneurial workforce. That has been four things, mainly. The first thing has been college loan debt. We currently in this country have a trillion dollars in college loan debt and an 8.8 percent default rate as of last year. And that is going to set back not just this generation, but the generations of tomorrow, because once you lose your credit score you're in a lot of trouble. ... We noticed there was a lack of peer to peer mentorship. There a lot of amazing programs in the U.S., but we've found there are a lot of [young] people don't feel that these programs communicate with them. It's a lot of older generations talking about their experience, which is wonderful, but [there are] not a lot of the current American young entrepreneurs talking to their peers. ... The third thing we noticed was that the living expenses post-college, just like college loans, are forcing young people, because they have to pay the bills, to either a) become boomerangs and live with their parents, which is not a supportive environment, or b) they end up saying, "Well, I can't go do entrepreneurship right now because it's just not economically feasible." ... The last point was that we found that in America entrepreneurship education is sorely missed. In our latest national survey, we found that there is an obscene amount of young people that have never experienced a single entrepreneurship class in college, and of the people that did get an entrepreneurship education, the vast majority have found it to be useless in the real world.
Out of that came Gen Y Capital Partners, where we said let's take not just an approach to investing in companies, but a 360 [degree] approach to also stopping what ails the generation from becoming entrepreneurs in the first place. Ultimately, by removing the college loans from the equation by working with the White House's new reformed income based repayment [plan]. Basically, our founders will opt into income-based repayment, and then what we will do is pay whatever is remaining. So if you're familiar with the program, it [is capped at] 10 percent of your income. We'll now pay that remaining amount for up to three years to remove college loans from the equation entirely. ... We're having folks live in places like Cogswell College, and we're also providing education through groups like Princeton and Georgetown and another school roster that's going to be announced soon. Finally, from a peer-to-peer mentorship angle, we have some of the most incredible doers in this generation as members. … We have a great peer-to-peer mentorship program with the YEC. Our members will not only be able to mentor these folks, but eventually be able to potentially co-invest alongside Gen Y Capital Partners and their businesses.
How do you apply for funding?
When people go to www.GenYCap.com and they go to the "Apply" section, they'll be asked to supply their executive summary, and they'll also be asked if they want to submit an up to one-minute YouTube video pitch so they can be seen and heard about their business along with some basic information. Starting in 2012, we'll begin consideration on which businesses we'll invest in. … The average investments will be between $15,000 and $50,000 plus the loan reduction, and in select ventures we'll invest up to $250,000. … Our investment company will take an equity percentage based on the business and the investment that we make.