The United States has a proud tradition of entrepreneurship, and students represent one of the most enthusiastic and creative groups of people in our society. Not only do young people look at problems with fresh eyes, but they have the drive and desire to succeed--often unburdened by family and mortgage commitments, the grueling 9 to 5, or overbearing bosses.
Unfortunately, there is an elephant in the room - and it's getting bigger. On average, Millennials earn $10,000 less than their parent's generation and student debt is spiraling out of control. In the States alone, debt has climbed to $1.2 trillion, with many graduates crippled by their monthly repayments. Who would want to take a risk and dive into entrepreneurship saddled with that kind of pressure to succeed?
It's about time we deflated that elephant and provided some solutions to enable students to pursue their entrepreneurial dreams. Here are three ways students can take back control and become the groundbreaking business leaders repreneurs they were born to be.
1. Entering Competitions
University competitions and programs are some of the most effective ways for students to get into entrepreneurship while studying. Stanford BASES and Santa Clara University's CAPE program both offer great tutelage to help would-be entrepreneurs get off the ground.
BASES is Stanford's longest running entrepreneurship competition, where students compete for a slice of $100,000 in prize money, with the overall winning startup and/or entrepreneur taking home $40,000.
CAPE empowers students with a 6-month weekend course that includes "virtual exercises, classroom instruction, case studies, group work, and experiential learning." CAPE aims to build business skills and a community.
At the end of the course, students produce a business plan pitch, which is judged by a panel of venture capitalists and angel investors. The best presentation is awarded $5000.
Budding entrepreneurs can also look further afield to international competitions. The Global Student Entrepreneur Awards (GSEA), is one such program. GSEA awards cash prizes and business services, and has the mission of "empowering student entrepreneurs to become the world's more influential change makers." Finalists have the opportunity to win a first prize of $20,000, and an expenses-paid trip to Bangkok in Thailand.
The Rice Business Plan Competition gives student entrepreneurs the opportunity to present their business plans and pitches in order to get the investment they need to get their projects off the ground. More than 160 competitors have successfully gone into business, raising more than $1.2 billion in funding in total.
2. Taking advantage of University and Government support
Competitions are not the only route to success; the United States boasts a selection of 176 colleges that allow students to take courses in business or entrepreneurship. Between them, those colleges offer more than 2,000 courses, giving students a great number of study programs to choose from.
The government also provides help and support for student entrepreneurs who need financial assistance in setting up their own business. The Small Business Administration (SBA) and the Small Business Investment Center (SBIC) provide low interest loans and investment opportunities to SMEs in the United States. Then, of course, there are Federal Aid Grants that students can use to help lower the cost of attending college.
The federal government bestows around $150 billion in grants and loans to students each year. This means that finding a grant or loan to support studies while students take on additional - and possibly unpaid - work experience, is not an impossibility.
Of course, that's not to say all internship opportunities are unpaid. Across the U.S., there are a number of paid internship opportunities available to college students. Websites like looksharp.com are built to help students find paid internships during holiday periods. In some cases, colleges can also help students secure paid and meaningful work experience.
As an example, Carleton College in Minnesota provides non-senior students with the chance to undertake internships in social entrepreneurship. While by no means paying vast sums, the grant offers between $2,000 - $5,000 for interns, helping to cover costs while they gain much needed business experience.
3. Seeking accelerator backing
Other options to consider when scrabbling for capital to get your startup off the ground are accelerator programs such as the Y Combinator, 500 Startups, and more. Although difficult to enter, these options are great for students who have already managed to establish a business.
The benefits of enrolling in an accelerator program can be vast, and are by no means limited to just financing. Counselling from experienced mentors can be invaluable to startups at the beginning and will help newer entrepreneurs more effectively use the cash they are given.
Y Combinator offers would-be startups a standard deal of $120,000 of funding for a 7% stake in the company.
The investor also helps startups work with their ideas over a three month period, putting them in a position to slowly begin the ascent to world domination. 500 Startups has a similar deal on offer, dishing out $125,000 (in reality $100,000, after course fees) to businesses for a 5% stake in the business.
Both accelerators provide small and new businesses with the opportunity to get much needed seed funding in order to grow their businesses. Not only is this often at a better rate than banks, they both come with tutelage and access to help - such as media relations - that would otherwise be more expensive to find.
Of particular interest to student founders - especially early stage entrepreneurs - is the Dorm Room Fund, a venture fund that now has four locations in the US, including in New York, Philadelphia, and the Bay Area near San Francisco.
Since its founding in 2013, the Dorm Room Fund has made 100 investments with the aim of helping student startups to get off the ground. While the funding limit is typically smaller - only $20,000 per investment (the program is built by and for students) - that hasn't had an impact on its success. In fact, in January this year Forbes named five DRF alumni in their '30 under 30' watchlist.
Venture Capitalists are also increasingly prepared to pump money into student led startups, it seems. And this phenomenon is by no means confined to the United States. VC's in Europe are also getting behind student led ventures with millions of dollars, euros and pounds being provided for student company funding.
Overall, there are a great many options available to students to get funding and support for their ideas.
These many routes to business success can help offset the impact of student debt and get those enrolled on college degree programs up and running without having to needlessly worry that they will never have access to the necessary funds. Whether using a university program, incubator or venture capitalism - or a combination of all three - students should be keen to leverage all the available options to make their startup dreams a reality.