Ask HN: What if teachers invested in students instead of charging tuition?

4 points by koopuluri 257 days ago | 26 comments

Imagine if teachers and mentors could invest in their students by giving them capital and teaching them in exchange for equity in their future outcomes (not income, but future equities in companies).

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?

al_borland 257 days ago |

What about all the people who don’t go on to start their own businesses? Do they not get taught?

koopuluri 257 days ago | |

This also applies to people who join companies and receive equity as part of their compensation. So initially, it’s most applicable to those who are likely to earn equity in the future — whether by starting a company or joining one.

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.

al_borland 257 days ago | | |

Why would I want to rob from my future self like that?

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.

aspenmayer 257 days ago | |

What about folks who go on to be teachers? Sounds like a pyramid scheme with extra steps.

koopuluri 257 days ago | | |

It’s not a pyramid scheme because it’s ultimately grounded in real value: equities in companies, which themselves are grounded in revenue.

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.

layer8 257 days ago |

> Alice is strongly incentivized to help her students whenever they need it, because she has equity in their long-term success.

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.

koopuluri 257 days ago | |

Oh absolutely, these students would be actively applying to be trained by the teacher. And you’re right, the student retains full agency; the teacher can’t (and shouldn’t) control what they do.

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.

koopuluri 257 days ago | |

It is a long-term investment, but it doesn’t have to be decades before there’s liquidity. Teachers could sell portions of their equity along the way through secondary sales.

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.

cratermoon 257 days ago |

https://bitworking.org/news/2008/01/the-free-market-fairy/

3np 257 days ago |

Perverse incentives. I don't think education should be optimized for future financial profitability of the student.

In very specific and rare circumstances (like your PG example) it can make sense for post-grad adults.

koopuluri 257 days ago | |

Education is already reduced to financial profitability today — just in a worse way. Tuition and student debt force students to pay up front regardless of whether the education actually helps them succeed.

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.

duxup 257 days ago |

This sounds like a scam and teachers get their students jobs and then more people get a cut and these students really get not much…

koopuluri 257 days ago | |

Students wouldn’t be giving up much: typically no more than 5–10% of their personal token. And importantly, this isn’t tied to income, so nothing in their day-to-day life is taken away.

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.

duxup 257 days ago | | |

5 to 10% seems like a lot.

Disposal8433 257 days ago |

It's perverse and disgusting. Also what about lazy students, neurodivergent, or poor people that are most likely not having a good outcome despite learning? In the end even average students would be ignored by the teachers.

What about everyone having the same education? What about not putting capitalism in everything?

al_borland 257 days ago | |

Some of the richest people are neurodivergent. Musk, Gates, and Zuckerberg have all said they have or likely have ASD. I’m sure there are more.

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.

krapp 257 days ago | | |

Maybe Musk, Gates and Zuckerberg are neurodivergent, IDK, self diagnosis is often self-serving. I don't think they are billionaires because their powers of autistic hyperfixation were properly directed.

You said there were "just 3 examples of the top of your head" as if there were a much larger pool from which to infer a correlation between autism and wealth. In most cases autistic peoples' special interests don't have million dollar market potential. I suspect the potential for wealth and placement on the autism spectrum are orthogonal to one another, and that factors like education, class and luck play bigger factors.