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The cash to train students needs to come from somewhere. So in Lambda School's case that's either VCs or some other investors. This makes sense for liquidity,
by maxerickson 6y ago
The cash to train students needs to come from somewhere. So in Lambda School's case that's either VCs or some other investors.
This makes sense for liquidity, but ultimately the ISAs are what has to provide the funding (or it's not a viable business).
As the investment terms improve, the portion of the ISA payout spent on training has to go down.
You are correct that the ISAs need to pay out to be an interesting investment, but if you are pricing the ISA to what the investment market will pay instead of what the training costs, it's not exactly a better deal for the students.
- austenallred 6y agoYou’re forgetting the student in all of this. At the end of the day the decision maker is the student who decides if it’s a good deal. The financing is all cashflow management behind the scenes that doesn’t really matter.
- maxerickson 6y agoSure, they can decide if the think the deal is worth it to them or not, but they probably aren't the one with the most information about the training spend and value of the ISA.
- austenallred 6y agoIt doesn’t really matter. As a purchaser of x it doesn’t matter to me what it costs to make x so long as I know clearly what x is. A Stanford grad doesn’t know what the marginal cost of their enrollment is.
- maxerickson 6y agoIt doesn't matter particularly to the student, but there is some utility, even from the outside, in estimating how much direct value a school provides and how much of a matchmaking service it provides. Your whole premise is that universities mostly provide matchmaking!