Day One


The idea behind Upstart was seeded less than a year ago. Some really interesting conversations led me to think about the decision every kid faces upon graduation from college – what to do next? Anecdotally, I heard cases where soon-to-be grads have an idea, a startup, or even just a direction that they’re excited about. 

Really excited.

Yet for some very practical reasons, they decide to take a safer path – to accept that job offer from the on-campus recruiter – instead of jumping in with two feet on what they really want to do. Two issues stuck out as the primary culprits preventing grads from following their passions: lack of confidence or support in how to get started, and student debt.

Now I’m aware that the plural of anecdote is not data, so I spent some time researching whether this phenomenon was widespread. We did some very basic research on four college campuses. I read a study by the Kauffman Foundation that found that 54% of recent college grads wanted to start their own company. Easier said than done, and many people in their twenties aren’t at the point where founding a company makes sense. But I viewed the Kauffman statistic as a majority vote by millennials against stepping onto the treadmill of a traditional career.

You can hardly see a political speech across the US that doesn’t mention our economy’s need for more innovation, for more entrepreneurs. In the last couple of decades, 65% of job growth has come from businesses with less than 500 employees. And in 2011, there was virtually no job growth in large businesses. Throw on top of those numbers the fact that two thirds of students in the US graduate with an average of more than $23,000 in school debt, and you have a very unpleasant situation: College grads standing in line for jobs that don’t exist. When politicians say we need more entrepreneurs, what they really mean is we need more people creating jobs, rather than taking them.

I was thinking about these issues while still at Google. In hiring hundreds of kids out of school every year, we took an analytic approach to assessing which grads would be successful at Google – and it worked. Yet at the same time, most of these kids couldn’t put their hands on $30,000 if their lives depended on it, other than through credit cards.

Why shouldn’t capable and ambitious grads be able to pull forward some income from their future selves – with their earning potential serving as collateral, so to speak? After all, $30,000 goes a lot further in your twenties, and can have a much larger impact in your life than it would later on.

We have a surplus of bright young people who want to carve their own way – to take a risk, start something new, and make a difference. They have all the energy and passion you’d expect from people in their twenties. In most cases, they’re yet to be weighed down by the obligations that curtail risk-taking later in life – spouses, kids, mortgages, health, etc. And while not generally creditworthy in the traditional sense, there are clear and measurable signals reflecting their accomplishments and hinting at their potential. Yet we collectively tell them to take the job.

Could we imagine a future where talented grads are given a modest window of economic freedom, combined with the help and support to do what they were really meant to do?

Enter Upstart. Today is day one for our team. We’re excited to bring this new crowdfunding platform to life. Through one lens, it looks like a way for aspiring twenty-somethings to raise capital and find mentors that can help them pursue their dreams. Through another, it looks like a whole new flavor of risk capital, waiting to fuel the next generation of entrepreneurs our economy so desperately needs.

While it will take us some time to make Upstart broadly available across the US (and beyond), we’re seeing great signs even at this early stage that the world needs this. As my good friend and Upstart investor Andy Palmer says, we live in a nation built on willingness to take risk (all the way back to the pilgrims, in fact!). For that reason, Upstart, or something like it, really needs to exist.

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