Today the Young Entrepreneur Council announced through the White House a new fund for young entrepreneurs called Gen Y Capital Partners. The YEC is an organization that is made up of America’s top young entrepreneurs and has been working closely with the White House to create initiatives to assist and develop young business owners. The YEC was founded a year ago by Scott Gerber to provide young business leaders with tools, resources and mentorship in their business.
Gen Y Capital Partners will be investing $10 million dollars over the next 3-5 years in as many as 100 startups. These investments will generally be in the range of $15,000 – $50,000 for early stage ventures across different verticals. However this fund also aims to tackle other barriers to entry for young business owners besides just investment dollars. According to Gerber “the investment company will create a new, scalable 360 degree approach to investing in our nation’s youth.”
The fund plans to go beyond investment dollars in three ways:
1. Removal of federal student loan debt.
Gen Y Capital Partners will be the first early stage venture fund to utilize IBR as part of its business model. After founders subscribe to IBR, Gen Y Capital Partners will go a step further, paying founder’s federal student loan debt obligations for up to three years and enabling them to concentrate exclusively on their ventures during the crucial startup phase, rather than feel the need to seek out traditional employment.
2. Elimination of living expenses and access to education.
Gen Y Capital Partners will offer select founders the opportunity to live on various college campuses across the US for up to two years. Collegiate partners will also provide access to their entrepreneurship education courses, faculty and interns. Gen Y Capital Partners collegiate partners include Cogswell College, Georgetown and Princeton.
3. Unparalleled access to peer-to-peer mentoring.
Gen Y Capital Partners will offer founders access to hundreds of Young Entrepreneur Council members and mentors in multiple fields and disciplines nation-wide, as well as an opportunity to join the invite-only YEC.
Surely the most notable part of the fund is the idea that it will pay founder’s federal student loan debt for up to three years while they get their business off the ground. It’s no secret college tuition is rising and many graduates today are not only without jobs but faced with huge piles of debt. Gerber’s take is that by helping take that pressure of loan repayments off in the early days it will free up more capital and time for the business.
The fund has numerous supporters where even the White House recognizes it’s importance:
“When President Obama launched the Startup America initiative earlier this year, he called on the private sector to do more than business as usual to promote the next generation of high-growth entrepreneurs. The new Gen Y Fund answers this call to action, drawing more young entrepreneurs ‘off the bench’ to start innovative companies that boost job growth, and complementing the Administration’s ongoing efforts to help borrowers manage student loan debt.”
— Tom Kalil, Deputy Policy Director at the White House Office of Science and Technology Policy