Ask HN: What if teachers invested in students instead of charging tuition?
For ex: Alice, a great designer, could give each of her students capital that the students can use to pay rent, food, products and services to help them design, explore, or whatever (it’s their money!).
But what exactly would Alice get in return? Let’s say we create a “personal token”, an instrument that represents an individual’s potential, with transactable shares, grounded in their equities in companies and other personal tokens (via dividends on capital gains).
So Alice would get shares (equity) in each student’s personal token in exchange for her training + capital.
This would mean:
1. Students don't take on debt. In fact they get paid to learn!
2. Alice is held accountable. If she fails to meaningfully improve her students' outcomes, she loses her investment. This means Alice is forced to adapt her training to what is actually relevant to the world.
3. Teacher-student relationships last years / decades, not semesters. Alice is strongly incentivized to help her students whenever they need it, because she has equity in their long-term success.
But why? AI is making outcomes extreme (power law distribution). We can already feel this in software engineering: AI makes the best engineers far better than the median. As the gap between the best and rest grows, it becomes too risky to finance education with debt for the same reason it’s too risky to finance startups or content creation with debt.
Paul Graham was one of the earliest examples of this model. He didn’t need to guard his knowledge or put it behind a paywall because he had a much more powerful way to capture value: by investing in the founders his essays attracted. If teachers could invest in students, knowledge would spread more freely because sharing knowledge itself would become a funnel for investing. Even students who never raise would still benefit from the higher-quality knowledge that becomes available.
Thoughts?
You are assuming that the student will be interested in that help, but you can't force help onto someone. How do you prevent the student just taking the money and doing whatever?
How many students will you have to mentor to get a guaranteed return?
Also, teachers typically don't have that kind of investment money, so would have to get funded themselves for that purpose. How would risk management work along that double-tiered, decades-long funding structure? It seems like a good way to burn a lot of money.
For example, if a student shows strong potential - say they ship a prototype that gains traction online - new investors may want to back them. At that point, the teacher can sell some of her shares to those investors (with the student’s approval), realizing value earlier while still staying aligned with the student’s long-term success.
As for returns: there are no guarantees, just like in venture capital. The model assumes a power-law distribution — you might mentor many students, but only a few will generate outsized successes. As AI makes outcomes more extreme, this dynamic will likely intensify, which is why equity (rather than debt) is the only model that works.
In very specific and rare circumstances (like your PG example) it can make sense for post-grad adults.
This flips the incentives: teachers only win if students do. Instead of extracting value at the start, they share in the upside when their students succeed. That seems like a healthier alignment than the status quo.
Over time, though, I see it spreading to more domains as venture-backed models expand. For example, more researchers now get equity upside because more companies are being built around various kinds of research.
How many teachers might one have? What good is the equity if all of it is being siphoned off by past teachers. I’d much rather pay a once than have that hanging over my head my whole life. Buy-once cry-once.
I could see people on track to get significant equity looking to buy their way out of this indentured servitude.
If giving up 1% to a teacher-investor helps me create 10x more value, that’s a fantastic deal. Without factoring in their impact on outcomes, it’s misleading to call that “robbing.”
And let’s be clear about what’s actually at stake. If I sell equity in a company for $10M, and a teacher owns 1% of my personal token, they’d receive $100k — only at that exit event. Compare that to owing a bank $200k in student loans right after graduation, regardless of outcomes.
It’s also not indentured servitude: there are no guaranteed repayments, I keep full agency, and personal tokens could allow “ejection” of shareholders if needed. Startup founders don’t see themselves as servants of their investors, and neither should students.
And honestly, I wouldn’t even want to buy back equity from investors who are actively helping me win. I’d rather keep them incentivized to keep contributing. (Of course, if they stop actively helping me I would want to buy back shares from them because they are deadweight). I think this could be implemented in a way that gives such control to the individual (e.g., you can buy back shares whenever).
If someone becomes a teacher, they would earn equity in their own students’ personal tokens. When those teachers eventually realize gains by selling shares, their own teachers (as shareholders) share in that upside too.
And if the teaching doesn’t actually create value, then everyone in that chain loses, which keeps the system honest.
Dividends only flow to shareholders when the student realizes capital gains (e.g., selling equity in a company), not from salary. Even then, there can be sensible safeguards, like only triggering dividends once total gains exceed $1M.
So students still keep nearly all of their upside, while gaining resources and support they wouldn’t otherwise have access to.
Also, I meant 5 - 10% over the course of their lives (across all that they raise from). I should have been more clear.
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What about everyone having the same education? What about not putting capitalism in everything?
I’m not defending the original idea, I’m not a fan, but the right special interest, properly directed, has had made billionaires. These were just 3 examples off the top of my head that I heard in passing over the last couple years.