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Life Capital

A Deep Dive into the Past, Present, & Future of Income Share Agreements

Erik Torenberg
Mar 26, 2019 · 14 min read

Introduction

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So: this is the dream — why hasn’t it happened yet?

Economist Milton Friedman Proposes Use of ISAs in Education —

Yale experiments with ISAs —

ISAs as a Financial Aid Option —

Upstart: A Short-Lived Attempt at “Kickstarter for People” —

ISAs for Vocational Training —

An Outlook for the Future of ISAs

Aggregation —

Novel Incentive Structures —

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Crypto —

What’s next?

Appendix: Addressing Common Concerns —

Isn’t giving up the legal right to a portion of future income equivalent to modern-day indentured servitude?

ISAs are unregulated. How do we structure and enforce ISAs without a legal framework to rely on?

Given that ISAs are riskier than student loans, but don’t require the same qualifications, aren’t ISAs prone to adverse selection?

Couldn’t ISAs result in lack of diversity and discriminatory practices?

Can’t students simply refuse to pay once they start earning income after graduation?

Equity is expensive (relative to debt), so wouldn’t students be better off sticking with traditional debt financing?

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