Peer to peer lending platform SoFi recently published a statement on the challenges of young entrepreneurs. We all know that making the decision to become an entrepreneur is an arduous task. Long hours and lots of risk. It is not the chosen path for everyone but remains a vital source of economic growth, and job creation, for the country.
SoFi states that the startup rate is about half the number of what it was three decades ago – believe it or not. Even while we are reading about hot startups like UBER and Meerkat. SoFi cites data from the US Census bureau (posted on 538) depicting the decline: The cost of starting a business may be going down, but somehow fewer people are deciding to start their own business. There are many reasons NOT to start a business such as: debilitating regulations; difficult access to funding; rising health care costs; and the list goes on. SoFi posits that one of the reasons is the crushing burden of student debt. Being saddled with a huge loan right out of Grad school or Undergrad can be a compelling reason to choose a more secure job decision – something being an entrepreneur cannot offer.
SoFi has developed a direct lending platform to help refinance student loans and they have had much success. What they have also done is to create an Entrepreneur Program designed to “empower” and give “financial flexibility” while providing a network of support … All things dear to a startup.
Over the past year, SoFi has received 30 entrepreneurs into the program having launched their 3rd class. Several have experienced breakout success by launching companies that have been acquired or at least generated enough traction to grow and capture investor interest.
While the challenges of paying off student debt is just one obstacle to an innovation economy, the moral here is that everyone needs to do more to encourage new business creation. From platform to politician we all need to be part of the solution.