StartupHoyas recently announced its new Georgetown Startup Stipend Program, which aids aspiring entrepreneurs with student debt, no strings attached.
The program, funded by a donation from the Schramm family, aims to give students the fiscal support they need to pursue a startup after graduation. While the program will not pay off all loans incurred at Georgetown, the graduates will receive a stipend covering payments for the first year or two depending on the case after they graduate, allowing them to focus on their ideas instead of personal financial concerns.
“The goal is to help more Georgetown students to actually pursue their dream,” Jeff Reid, founding director of the Georgetown Entrepreneurship Initiative, said. “So many students are excited about entrepreneurship, but their student loan debts make them nervous, and because of that anxiety, [they] feel like they have to go work for some big company.”
While Georgetown — and specifically the McDonough School of Business — is known for prepping students for consulting or finance careers, StartupHoyas strives to ensure students are not choosing these postgraduate routes just because they offer the most security in terms of salary.
“There’s nothing wrong with those careers, but I hear students all the time say that they don’t want to go into banking, but they feel like they have to for a lot of reasons. This program, this startup stipend, will give them enough money to alleviate their fears,” Reid said. “They still have all the challenges an entrepreneur would have; they just don’t have to worry about paying those debt payments.”
The money is given to accepted students upon graduation and every couple of months thereafter. The final amount given to a specific applicant is calculated based on what his or her loan payment would have been. However, unlike a loan, students do not have to pay the money back, regardless of whether their business succeeds.
“Our goal is to allow them to take that risk, to take that chance. We know some of them will fail, and that’s ok,” Reid said. “They’ll give it a try, and they will probably learn so much. Even if they do fail, it is worth the effort.”
Although there are no official numbers for how many applicants will be accepted into the program, Reid maintains that the focus is not to make a competitive application process but rather an opportunity for as many students as possible to pursue their dreams. The application will not require a formal business plan, although proof of validity is required.
“We need to see that they’ve been working on it for a while, that they’ve talked to customers, that they know what they’re doing,” Reid said. “We know that there will be a lot of things that could change over a few months [in terms of their business model]. That’s the way the world of entrepreneurship works. But we want to see that at least there’s something that has credibility to it.”
Reid proposed the scholarship idea to the Schramm family, who immediately embraced the concept.
While at Georgetown, Victoria Schramm (COL ’12) had classmates in the same scenario that the new program helps address, but they ultimately decided to take a job at a bigger firm instead of pursuing their passion.
“People told her that they went to work for some big company and that they hated their job. They wished they had done something with a startup, but they hadn’t because of student loan debt. The idea resonated with her,” Reid said.
Schramm, who was heavily involved in entrepreneurship as an undergraduate and was president of Kairos, a group of student entrepreneurs from around the world, wanted to give students the chance her peers did not have.
“With new programs every year, Georgetown students are starting companies more than ever before,” Schramm said. “With all of this success, we simply can’t have these entrepreneurs being forced to abandon their companies for financial security in a job they dread. It’s a loss of our talent and our values as an institution.”
Reid, however, is aware that, just like Schramm’s peers, students posed with the choice of taking an offer at a larger firm or creating their own venture might opt for the less risky option, but he hopes that this new program will increase the likelihood of choosing the latter.
“It’s a difficult decision for a student to turn down a job offer or not go through the recruiting process. We want to help them vindicate themselves for starting a company,” Reid said. “We have students who do that every year, and we’d like to have more.”
Although the application has not been released yet, students are encouraged to express their interest through the StartupHoyas website and make use of the resources available through StartupHoyas, including mentoring and advising.
“This program is for the students who really do want to start something right out of school. It’s an amazing opportunity to do that. We don’t want things like student loan debt to be an impediment to that,” Reid said.