Funder Questions

  • Why is this a worthwhile use of my capital?

    In short, because our education system desperately needs a change. Microschool Revolution is the most scalable way to bring an affordable, personalized, 21st century education to every member of the next generation.

    “Today more than ever, we prize academic achievement, pressuring our children to get into the “right” colleges, have the highest GPAs, and pursue advanced degrees. But while students may graduate with credentials, by and large they lack the competencies needed to be thoughtful, engaged citizens and to get good jobs in our rapidly evolving economy. Our school system was engineered a century ago to produce a work force for a world that no longer exists. Alarmingly, our methods of schooling crush the creativity and initiative young people need to thrive in the twenty-first century.”

    – Tony Wagner & Ted Dintersmith, authors of “Most Likely To Succeed”

    A few statistics from MLTSfilm.org to consider:

    • 53% of recent college graduates are under- or unemployed.
    • Student engagement in school plummets as they get to higher grades—from 80% in elementary school to just 40% by the beginning of high school.
    • Just 11% of employers—yet 96% of academic provosts—believe colleges are effective in preparing graduates for the workplace.
    • A Lego Foundation study reports that students lose more than 90% of their creative capacity during their school years.
    • Gallup found that college grads who had opportunities to apply classroom learning to internships, jobs, or ambitious projects are twice as likely to be engaged in work later in life.
    • 65% of today’s grade-school children will end up in jobs that haven’t been invented yet.
    • The current length of a job for a millennial is an average of 2.6 years, and millennials will have 15-20 jobs over the course of their working lives.
    • By 2020, 40% to 50% of all income-producing work will be short-term contracts, freelance work and so-called SuperTemps.
    • 45% of recent college graduates return home to live with their parents.

    Sir Ken Robinson persuasively makes the case in the most watched TED talk of all time.

  • So what’s the overall process for providing seed funding for a microschool?
    1. The first step is choosing among Microschool Revolution’s three different options to start microschools:
      • Philanthropic grants
      • Program Related Impact Investing loans that return to you
      • Program Related Impact Investing loans that stay in a self-refreshing fund for future new microschools
    2. Specify any criteria for the types schools you’d like to fund.
    3. If making school startup loans (rather than grants), choose an interest rate.
    4. Determine the total fund size.
    5. We will bring you applicants meeting your criteria. You choose which ones to support.
    6. Typically, a new microschool will need $100k to start and make it to breakeven, usually in the second year.  Additionally, Microschool Revolution requires an additional 15% ($15k) to service the grant/loan and provide startup support services to grantees during pre-launch and their first year.
    7. Microschool grantees will be required to use our system for tuition payments from families.
    8. Once school begins, an 8% royalty will be taken out of tuition payments (possibly higher for larger loans).  7% will go to pay down the loan balance ($115k plus any accumulated interest charges), and 1% will go to Microschool Revolution for servicing and support.
    9. Depending on the interest rate and school growth rate, we expect loans to be paid back with interest in roughly 7 to 10 years (see attached microschool financial model for details).
  • How do I select the schools?

    When we talk with you, we’ll collect your specific interests regarding the types of schools you’re interested in funding. For example, some funders might be particularly interested in schools in rural areas, schools with a particular focus on the arts, or religiously-affiliated schools. When we come across a founder or founders who fit your criteria, we’ll connect you. After you review their applications and talk with the founders, you’ll select which founders you’re interested in funding.

  • How much money do I have to commit?

    Ultimately, the amount you commit is decided between you and your matched microschool founder. We’ve found that most microschools require about $100k of start-up capital, and we expect our operational fees and services to the schools during the first year leading up to launch to be about $15k. These numbers are flexible, though, and our founders ask for a range of seed investments. Tell us what you want to commit, and we’ll match you with a school founder with a compatible ask.

  • How long will it take for the founder to repay my loan?

    The loan is repaid based on a percentage of the tuition, so the time it takes depends on how much tuition revenue the school is generating. We expect most schools to pay off the loan in 7-10 years.

  • What’s my rate of return?

    You set the interest rate on your loan as part of the agreement between you and the founder.

  • What happens to my money if the founder decides to quit?

    You’ll loan money to the school’s legal entity. If the founder passes off the school to another person, the school would still be responsible for repaying the loan to you. If the school closes before repaying the loan, the loan would be in default. At that point in time, you may go through the appropriate legal channels to claim remaining assets and regain as much of the outstanding loan as possible.

  • What is my level of interaction with the schools?

    Your interaction with the founder, the school, and the families of the school is entirely up to you. Microschool Revolution exists as an intermediary so you don’t have to spend too much time helping the school get off the ground – we’ll take care of that! At the same time, we’d encourage you to have as much contact with the school as you’d like to have. We recommend that you set expectations with your microschool founder discussing the terms of the loan.