Gen Y Capital Partners Wants to Help You Start a Business, Despite Student Loan Debt
BE Next: What is the Gen Y Capital’s exit strategy? How long do you plan to invest in a business that, let’s say, is actually successful?
Scott Gerber: It depends. But 3-5 years is probably the minimum. There are two stages of investment. Early rounds which will consist of $15,000 – 50,000, and select investments up to $250,000. The entire fund consists of 10 million over the next several years. We’ll probably looking at around 100 companies over a few years.
BE Next: You’ve just started accepting applications on Nov. 1. But what do you think the mix of entrepreneurs will be in terms of diversity — both ethnic and gender? Recently snippets of CNN’s Black in America 4 came out that highlighted not only how few minorities there are in technology but also the additional barriers that minorities have to overcome in Silicon Valley.] How do you plan to build inclusive engagement?
Scott Gerber: Look at our current members of the Young Entrepreneur Council. There’s a very eclectic mix of women and minorities, including Michael Siebel (JustinTV), Arielle Patrice Scott (GenJuice), and Tina Welles (Buzz Marketing Group) and many more.
It would be wrong for any group to say they are only looking for a specific type of entrepreneur. We certainly do not, either. We’ll be working with the Network for Teaching Entrepreneurship and we’ll also be donating a portion of our funds to the network so we’re investing in that pipeline, paying it forward.
The African-American community faces tremendous difficulty when it comes to entrepreneurship, employment, and so forth. I believe it’s our patriotic duty to help young people of all ethnicities, especially those who are low income, to become successful building businesses. Whether it’s our investment company, job fairs, or what have you, it all comes back down to pushing this generation forward together. Getting to those communities that, frankly, think it’s over for them and there’s no way out. When African American children are exposed the results are astounding. We hope we can train and empower the next generation so that they are equipped with the skills they need to not only survive but also make a difference.
BE Next: Do you think young people are more or less averse to starting businesses than in the past?
Scott Gerber: Excellent question. We have some great stats on this. Every year we along with Buzz Marketing group do surveys regarding young people investing into entrepreneurship. The numbers are astounding. Here they are:
The following data is taken from YEC and Buzz Marketing Group’s annual Youth Entrepreneurship survey of over 1600 American males and females ages 16-39.
- Only 26% were offered classes on entrepreneurship.
- 72% who did take entrepreneurship courses found the education provided insufficient enough to start a business.
- 88% believe entrepreneurship education is important given the new economy.
- 33% are self-employed, up from 26% in 2010.
- 70% believe they do not have enough support from banks.
- 15% started a business in college, up from 13% in 2010.
- 23% started a business as a result of being unemployed, up from 21% in 2010.
- 88% feel they have no support from the government.
- 40% started a side business, up from 36% in 2010.
Now more than ever entrepreneurship is accessible, practical, and a vibrant career path. There’s a lot to be said for what technology has done for us as well. What we’re facing now are the sorts of problems that can lead to long-term economic calamity. I think it’s vital that we continue down this path of not just educating young people about entrepreneurship, but also investing in those that have the passion, interest, and acumen to make it possible.