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Management 13th Edition by John Schermerhorn,Daniel Bachrach
Edition 13ISBN: 978-1118841518Management 13th Edition by John Schermerhorn,Daniel Bachrach
Edition 13ISBN: 978-1118841518 Exercise 4
THINK BEFORE YOU ACT
Undergraduate student gets $38,500 from investors who give him upfront money in return for a portion of what he earns in the future.
Students Are Crowdfunding Their Human Capital
S ituation: An undergraduate student at an art and design school needs money to pay back student loans and fund ideas for a startup company. He goes online at Upstart.com and finds investors willing to give him upfront money in return for a portion of what he earns in the future. He signs on and takes in $38,500.
The idea here is to sell equity stakes in your human capital. In other words, get money now from people willing to invest in you while hoping for a good return from rights to a percentage of your future pre-tax earnings. Terms used to describe this form of crowdfunding are "human-capital contracts" or "social financial agreements."
Th ose in favor of students' crowdfunding their human capital are likely to say that it helps students get the education or resources they need to succeed. It's also a way to avoiding interest on debt. If the student fails to earn enough or the project fails, the investor loses his/her money. The investors may turn out to be good mentors and motivators that help the student to achieve higher levels of accomplishment. Those against students' crowdfunding their human capital are likely to say that it's a form of servitude. It's not right for one person to indenture themselves to another in this way. Young students, furthermore, may not be mature or insightful enough to make good decisions that commit them to long-term financial contracts. If the student's "back is to the wall," she or he is vulnerable to making a really bad personal decision.
YOUR TAKE
What do you think Is crowdfunding human capital something that sounds attractive to you What are the possible risks and returns associated with crowdfunding as you see them If you were a parent, would you let your child sell shares in his/her future If you were an investor, would you consider this a legitimate way to earn a return on your money Why or why not
Undergraduate student gets $38,500 from investors who give him upfront money in return for a portion of what he earns in the future.
Students Are Crowdfunding Their Human Capital
S ituation: An undergraduate student at an art and design school needs money to pay back student loans and fund ideas for a startup company. He goes online at Upstart.com and finds investors willing to give him upfront money in return for a portion of what he earns in the future. He signs on and takes in $38,500.
The idea here is to sell equity stakes in your human capital. In other words, get money now from people willing to invest in you while hoping for a good return from rights to a percentage of your future pre-tax earnings. Terms used to describe this form of crowdfunding are "human-capital contracts" or "social financial agreements."
Th ose in favor of students' crowdfunding their human capital are likely to say that it helps students get the education or resources they need to succeed. It's also a way to avoiding interest on debt. If the student fails to earn enough or the project fails, the investor loses his/her money. The investors may turn out to be good mentors and motivators that help the student to achieve higher levels of accomplishment. Those against students' crowdfunding their human capital are likely to say that it's a form of servitude. It's not right for one person to indenture themselves to another in this way. Young students, furthermore, may not be mature or insightful enough to make good decisions that commit them to long-term financial contracts. If the student's "back is to the wall," she or he is vulnerable to making a really bad personal decision.
YOUR TAKE
What do you think Is crowdfunding human capital something that sounds attractive to you What are the possible risks and returns associated with crowdfunding as you see them If you were a parent, would you let your child sell shares in his/her future If you were an investor, would you consider this a legitimate way to earn a return on your money Why or why not
Explanation
Verified
Verified
Crowdfunding basically refers to the phe...
Management 13th Edition by John Schermerhorn,Daniel Bachrach
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