The Importance of Bringing Crowdfunding to Higher Education

I speak often about the opportunity to couple investment crowdfunding with existing financial, intellectual and physical infrastructure. Universities have invested decades in time, and millions in capital, in building all three. With access to biased and engaged capital (alumni); vast intellectual capital reserves (faculty and students); and expansive physical infrastructure (equipment, spaces), Universities are uniquely positioned to meaningfully capitalize on this opportunity. And doing so—integrating and championing a University crowdfunding solution— will create enormous value for its direct and indirect stakeholders, including students, alumni, and community members.

This is a dense subject so I’m going to break it into three parts: Part II of this University Crowdfunding series will speak to Alumni engagement; Part III will focus on the University’s community at large; but first, let’s start with the students.

What If…

I attended the University of Akron, a school of 20,000+ undergraduate and graduate students. What if each and every one of these students were given ubiquitous access to a platform that guaranteed them the opportunity to start a business? No arbitrary semester deadlines; no degree pigeon-holes; and no resource constraints. Across all majors, at any given time, students could catalyze their studies, passions or accidental discoveries into an entrepreneurial initiative. Big or small. Some students would plan their path; most likely finding their way spontaneously, a consequence of a mid-semester idea, or perhaps a run in with an inspiring professor or Alumni. Empowering any student, at any time, to become an entrepreneur would be an insanely awesome achievement.

With crowdfunding, it not only can be done, it needs to be done.

The problem today is that Universities approach entrepreneurship linearly: planned programs, planned degrees, on planned time lines. But this linear approach fails in the very non-linear world students live in. (In fact, it’s the world we all live in!) Few students understand entrepreneurship going into their first semester of college—let alone if its the path they want to pursue, let alone when or how. Their discovery happens non-linearly, so a linear solution will fail. Rather, students need to be surrounded with resources and opportunities that can be accessed anytime, anywhere, and most importantly, by anyone. Regardless major.

And this is where crowdfunding steps in. An integrated crowdfunding solution, deeply supported and championed by the University, is one step towards achieving this goal. Let’s look at how.

The Platform

This University crowdfunding solution would need to accomplish three things: inform, engage and involve.

  • Inform Resources and information centralized; easily discoverable
  • Engage A collaborative network of students and faculty that guides, motivates and supports
  • Involve Once informed and engaged, students are given a seamless path to getting involved—writing the business plan, attending workshops, raising funding, etc.

The majority of students won’t get involved, or want to become informed. (For the same reason I hated Biology; it just wasn’t for me.) But the key is this: every student needs to know that (a) they can and (b) precisely how. The path to discovering, engaging and getting involved with the opportunity needs to be frictionless. Far from where it is today.

Google any variation of “Startup programs at [University Name].” Is the information centralized? Clear? Actionable? Probably the exact opposite. The discovery process is incredible frictional. And this is an enormous problem. Online buyers abandon shopping carts if the checkout process is too onerous; in this same manner, students drop out of the entrepreneurial pool—or never find it in the first place— if the process of discovery is too onerous. Friction creates loss; and in this case, it’s the loss of an unknown number of students whose entrepreneurial capacity is never captured. Anytime a student searches for an entrepreneurial resource, they need to be directed to a centralized platform that’s designed to capture, cultivate and grow their interest.

Here’s what such a platform would look like, versus today’s linear approach.

University Crowdfunding

The platform gives entrepreneurial access to all students. Across majors, and across time. Once the network is built and acquired —students using it to discover and engage with information— they will invariably begin to interact. Creating support groups, finding team members, asking questions, et cetera. The value of this interaction is enormous. Spontaneous and unpredictable, it will grow organically, and exponentially.

This is just one component, the online platform. The most effective solution must be online-to-offline.

Online-to-Offline: Let’s not forget the class room

Online brings dramatic efficiencies (ubiquitously discoverable) but only offline can bring the deep engagement and mentorship that students need. Offline, we need to bring crowdfunding into the classroom.

I had a great college experience. Largely because my University was greatly supportive of my initiatives, both on campus and off. But a perennial frustration of mine was the severe shortage of application-based learning. Exceptions to be sure, but the unfortunate majority of classes sentenced students to a semester of textbook confinement. Read, memorize and test. Rinse and repeat. It’s a wretched way to learn as knowledge in the absence of application is fleeting.

For the things we have to learn before we can do them, we learn by doing them. — Aristotle

A simple truism: learning is doing; and doing is learning. Students desperately need more of these “doing” learning experiences.

Unfortunately, within the existing status quo, there often aren’t enough “doing” opportunities to go around. (Ignoring predatory commission-only internships.) The consequences are steep as employers are increasingly demanding applied experience from new graduates. For all too many students without it, they’re graduating unequipped into a tough labor market.

The platform can help solve this structural shortage in two ways: (i) organically creating more applied opportunities in-class; and (ii) engaging Alumni more efficiently to onboard more external opportunities to match students with (internships, mentorships, etc.)  We’ll explore (ii) in the next article. Let’s start with (i), and how Universities, through crowdfunding, can significantly increase the aggregate supply of applied opportunities it offers to students.

At its essence crowdfunding is a tool. A tool that shapes anything into a participatory experience. Taking an entrepreneurship class? Why read about it? Do it! The structure could be quite simple. A professor tasks groups of students with starting a single-product/service business, and requires them to seek actual funding for it. [Via the intra-University crowdfunding platform.] By way of example: One group attempts to raise $500 to fund their on-campus catering business, easyfood.io. They engage investors (friends, family, students, supporters, alumni!) with a simple revenue-share agreement. Investors receive a percentage of revenues generated in that semester.

Some groups rock it and generate a financial return for investors; some groups raise funding, but fail at executing; and, of course, some groups fail to find funding, forced to incorporate investor feedback and iterate their pitch.

Flipping awesome! Succeed or fail, this practical experience is absurdly more valuable than any textbook and equips students with the experience they desperately need.

Re-imagining how entrepreneurship works

Entrepreneurship is not a degree. Nor can it be a single program. It’s not fixed, finite, or defined. And it cannot be boxed in, controlled or predicted. Universities need to obsolete systems that try, and re-imagine new ones.

As students across all functional backgrounds discover an entrepreneurial interest, systems need to be in place to support them. Rarely will their interest be planned, rather, spontaneously ignited from a passion, need, or study. An art student who wants to open his own gallery; an English major who wants to start a tutoring business; or a polymer engineer who wants to patent and comercialize her research.

An intra-University platform, of which one modality is crowdfunding, can be the system that captures and cultivates each and every one of these inclinations. With every student on campus aware of the path to entrepreneurship, empowered to take it, and supported in finishing it, just imagine the entrepreneurial renaissance they can lead.

p.s. If you found this content interesting, shares are greatly appreciated! :-)

About Jonathan Sandlund

Founder, TheCrowdCafe

  • Cary Harwin

    The resistance to utilizing the new crowdfunding vehicles by universities is astounding to me. It is very difficult to get them to even share a sites existence and opportunities with students and professors. We have created specific portals for Undergraduate Researchers and Education and have great difficulty getting the word out directly to those it would benefit.
    http://www.fundageek.com/research
    http://www.fundageek.com/education

    • Thanks for the comment, Cary. I’ve heard similar feedback from other platforms working the University vertical. Exceptions to be sure, but most Universities are hierarchical, slow, and not particularly motivated to change. I met with a major University last fall to bring them up to speed. But things just don’t get done. Too many departments. Too many decision points. Too much politics. And at the end of the day, they’re very comfortable with the status quo.

      Again, however, certainly exceptions. I know a number of other cf platforms working with Universities, to varying degrees. One reader sent me a great example of a Uni in the UK that partnered with PeopleFund.It, Plymouth University.

      Through the new partnership, students and graduates will get involved in the day-to-day running of the site, which will also open up avenues for graduates launching out in business, from projects evolved at the enterprise university.

      Peoplefund.it also has plans to develop a digital and marketing communications-based course for the university, which will see students play a role within the crowd-funding platform, as part of their course activity.

      The university will also be lending its own business start-up support to fledging projects born from the platform, and also advising on enterprise, business support and funding, on the website.

      Link: http://www.thisisdevon.co.uk/Crowd-funding-venture-forges-university-link/story-16105247-detail/story.html#axzz2Pyssa0p3

      Ultimately, a University will have to be all hands-on-deck, across all departments, to implement the most effective crowdfunding solution. On the investment side it’s critical to engage Alumni; unfortunately, efforts here will likely run into strong headwinds from incumbent Alumni departments that guard their database and communication channels with an iron fist.

      Giving Alumni direct access to funding innovation (startups, R&D, etc.)—opposed to writing checks for blank causes— will side-step them, and effectively reduce the amount of power/control they have. I’m sure they won’t take this lightly. But in time they won’t have a choice. If they refuse to offer it—private platforms (Alumnifunder, etc.) will.

      • This has to be the way forward. Universities must be brimming with untapped innovation that a crowdsourcing platform can open up. Look forward to the next 2 articles, and even more to some success stories from the community.

      • I agree – I am glad my universities have been progressive towards crowdfunding education

  • Guest

    I’ve been thinking bo

  • Good article and an area I see growing rapidly. Colleges and universities will eventually have to adapt and utilize technology as students begin to look for more flexible, less costly alternatives in education. Any idea when the 2nd part of your series will come out?

    • Many thanks, Christopher. Will publish Part 2 in the next two weeks. Still trying to catch up on other Series’ of posts as well.

      Re cost and flexibility, couldn’t agree more. Universities have to adapt — and the public capital supporting them must hold them accountable to it.

  • Really great insights, especially on learning by doing – universities should definitely need to start supporting the application of education learned in the classroom to the real world! Can’t wait to read Part II

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  • The Biz Teacher

    Just read your post today. Love the concepts! As more people begin to understand the true power and capability of crowdfunding, perhaps we can truly help our students achieve a brighter future that is not saddled with over $1 Trillion in student loan debt. As a teacher, I know I am doing my part to educate students on avoiding the pitfalls of student loan debt. As an entrepreneur, I am helping to mentor students to a debt free education with Financial Aid Foundation. Crowdfunding is that way to go to help reduce the problems associated with student loan debt.

  • The Biz Teacher
  • Pete Tinker

    I totally agree with what you say. This definitely ties well into your next article. Crowdfunding is one component of getting students involved, and it facilitates collaboration, especially coworking.

  • André Amedomar

    Amazing, interesting! I own a Brazilian Educational Crowdfunding Platform and the article gave me insights. When we are to see the second part, Jonathan?

  • Sean

    Great read as always, and a topic i have spent the better part of a year working on.

    While there is no doubt that Universities need to do more to encourage entrepreneurship and that crowdfunding would be the most straight forward and convenient way for them to gain access to capital and engage alumni, there is still a major question surrounding how involved can a University really get with the exchange of private securities.

    Can they bare the legal burdens associated with the exchange of private securities? What are liabilities for encouraging alumni to invest in high risk & illiquid securities? Are public Universities even more restricted in this area? Who is responsible for conducting diligence and screening?

    Thus far, I have seen reward or pure donation based crowdfunding initiatives associated with universities for various organizations and clubs, raising between $500-$5000

    Furthermore, lets say Universities did start branding their own portals for the sake of allowing alumni to invest in student startups- is that really the solution? Crowdfunding is all about accessing “the crowd” and hitting critical mass. Does creating some ego-centric university by university fundraising platform really accomplish the issue of helping young entrepreneurs? or does it serve as just another way for Universities to funnel money from Alumni?

  • Jason Case

    Excellent concept Jonathan. I hope universities will start adapting a similar concept in the near future. Looking forward to part two!

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