Potential upstarts begin by creating a profile. The backgrounds and goals of upstarts vary widely - some are looking to pursue an entrepreneurial endeavor, while others aim to retire student debt or invest in their education. We verify the applicant’s identity, academic credentials and credit status before they appear on our website.
We use our proprietary statistical model to predict each upstart’s income over the next decade. This model allows us to generate a funding rate, which is the amount he or she can raise for each 1% of income shared - for either a 5 or 10 year term. Upstarts can then choose how much money to raise, but can share no more than 7% of their income. Our model targets a 8% average annual return to backers, though actual returns will vary from upstart to upstart.*
*The pricing engine relies on broad-based statistical data that is not representative of any individual’s actual future income. The target return is highly speculative and not based on historical experience.
Backers can browse upstarts by school, area of study, or career interest, and then read about the unique goals and background of each individual. They can make offers in increments of $100, but upstarts always have the right to choose whether to accept any particular backer. To be funded, each upstart must raise a minimum of $10,000. At the end of their funding periods, upstarts make their final decision about whether to accept their funding.
Upstarts share a set percent of income with their backers over 5 or 10 years. Payments are waived for years in which the upstart earns less than a minimum income amount, but an extension year is added, up to an additional 5 years. Upstart Network collects monthly payments and reconciles each upstart’s income annually via their US tax returns. Total payments are capped.
Upstarts will provide updates to their backers about their progress. In addition to funding, backers can provide advice, make connections, and open doors. By helping upstarts, backers can help them realize their potential while improving their own return.
A little capital at the right juncture in a person's life can produce big returns. Upstart gives individuals access to that capital, and backers the chance to share in those returns.