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https://www.wired.com/story/how-we-learn-lambda-income-sharing-agreements/ https://www.wired.com/story/how-we-learn-lambda-income-shari... "In the meantime, La
by sandofsky 7y ago
https://www.wired.com/story/how-we-learn-lambda-income-sharing-agreements/ https://www.wired.com/story/how-we-learn-lambda-income-shari...
"In the meantime, Lambda shifts the equation: For about half of the ISAs, the company sells the rights to a portion of its returns to investors; in return, it gets cash up front."
You can even see a "Sample Offering" for Lambda School on Edly, a marketplace for reselling ISAs: https://edly.info/investors/ https://edly.info/investors/
- tempsy 7y agoOk got it - but what's the issue? This is similar to invoice financing, which is a pretty common practice. The only way I see this impacting student outcome is if the school loses motivation to help students post-graduation, but the discount for selling these ISAs must be very high.
- austenallred 7y agoBingo. ISAs are financed one way or another, whether it’s with VC or with an ISA-backed financing mechanism. Lambda School is still on the hook and loses money until the students are placed and have paid back. It’s about incentive alignment.
- barry-cotter 7y agoYou do realize Lambda has to persuade investors that these ISAa will pay off, right? They’re still highly motivated to get their students making money either way. If they hold the ISA and the student doesn’t make any money they don’t make any money. If they sell the ISA and their students don’t make any money soon they won’t be able to sell them and then they don’t make any money.
- Canada 7y agoNever underestimate people's willingness to grab money now even when the rational long term strategy would ultimately pay more.