This week, with support from the White House and the Obama administration, the Young Entrepreneur Council (YEC) announced the launch of a new startup accelerator and investment company, Gen Y Capital Partners. The new program will provide seed capital for tech-enabled startups created by Gen Y’ers (those under the age of 35).
Like many accelerators, Gen Y Capital Partners (GYC) will provide mentoring, education, and assistance with living expenses. But the best part of the program? Getting in means getting rid of your federal student loan debt.
According to the announcement, the program is the first to use the President’s Income-Based Repayment (IBR), which lowers the student loan repayment to 10% of the student’s discretionary income and adjusts the forgiveness timeline to 20 years. In addition, for those founders who apply to IBR, GYC will go a step further and pay down the student loan debt until it reaches zero (for up to three years), allowing them to exclusively concentrate on building their company.
GYC will also offer founders the opportunity to live on college campuses for up to two years, with help from collegiate partners like Cogswell College, Georgetown and Princeton. Founders will be able to access GYC’s advisors plus hundreds of YEC members and mentors. And they will be allowed to join the invite-only YEC, an organization of young entrepreneurs founded by serial entrepreneur Scott Gerber, a syndicated columnist, TV host, angel investor and author of the book Never Get a “Real” Job.
Over the next 3 to 5 years, GYC will invest in as many as 100 startups, and over the next decade, several hundred more. The group plans to scale the fund over the next 24 months, the group says, and will begin to roll out more incubator programs on college campuses across the U.S.
To be clear, there is no government money in the fund, only that from private investors. The debt repayment the program provides is in addition to the equity investment of $15,000 to $50,000 GYC makes in the startups it funds.
Gen Y Capital Partners will begin reviewing applications on November 1st, and will announce the first class in early 2012.