You’re destined for great things. You have a bright future ahead of you. I believe in you.

You get the idea. I’m sure you’ve heard one or more of those sentiments or some similar. Don’t you wish you could take those words down to the bank and cash them! Well, the game changer has arrived. Now, individuals can do more than just say that they believe in you. They can invest in you. Literally.

Before explaining how it works let’s use an example you may be a little bit more familiar with. Think of equity in a home. Let’s say you were going to purchase a home for $50,000, but the home was valued at $80,000. The $30,000 difference would be your equity in the home. Meaning, that you could sell the home at $80,000 and make a $30,000 profit. If you wanted to utilize that $30,000 without having to sell your home then you could get a home equity loan. The bank doesn’t mind giving you the loan because your equity is backing you up. They take confidence in knowing that if anything happens, the home can be sold and they’ll get their money back. You pay the home equity loan back just like a normal loan.

The process with people is a little different of course. But surprisingly, not by much. For starters, instead of using a bank as you would with a home equity loan, you will use one of the crowdfunding platforms. Upstart is one that is doing well with finding investors for individuals. The process is kind of like online dating. You create a profile for yourself and present yourself to investors. On the profile, you’ll include your pictures, resume, credit score, academic accomplishments, and other pertinent information. The hope is that your talent, education, personality, and other factors make you very valuable and appealing.

Once you complete the profile, your job is done. Upstart will analyze your profile to determine your earning potential and rate. If it is deemed profitable, you’re approved. They will then determine how much your potential investors could earn from backing you which is the interest on the loan in which you would be accepting. The official term for the agreement is Human Capital Contract. I know that sounds like a lot. Essentially, you are cashing in on the equity on yourself.


There are some pretty good benefits to this very unconventional way of supporting yourself. It allows for freedom to pursue your dreams. Instead of working a job that you hate to save money to invest in your business endeavors, you can use the money from your backers. For example, maybe you’re a musician that works a regular 9-5 to pay for studio time and living expenses. In that case, you would want to utilize Pave, another company that offers Human Captial Contracts. Pave focuses more on creative entrepreneurs. You could showcase your talent on the platform. Investors that believe you have the potential to go far would back your endeavors. You are now in a position to quit your job and use the equity in yourself to pay for the studio and living expenses. That allows you the opportunity to focus your time on your passion, music.

Another benefit of Human Captial Contracts is that there is the potential to gain more than just backers. Some of the backers that see the potential in you could also become your mentor. Upstart is even in the process of creating a messaging feature that would allow you to communicate with your backer/mentor seamlessly.


Of course, the biggest con with trusting this service is that it is so new. Being a participant makes you somewhat of a guinea pig. Upstart has successfully funded 40 people by way of 100 backers. Pave has funded eight people in its initial launch and they are working to fund 9 more. Yet, neither of those numbers are substantial and it still leaves room for unpredictable mishappenings. Another con is that if for any reason you are unable to reach the expected success you will find yourself in even more debt. Fortunately, though, this type of debt would be able to be forgiven in bankruptcy.

Do your research

Just like when making plans to purchase shares in stocks, it is imperative to do your research. It is even more vital when considering selling stocks in yourself. Understand how it works and what you’re getting yourself into. There is a lot more to it than mentioned above. It could either go really well or really wrong. But at the end of the day, you have to be willing to bet on yourself!