This Week in Startups E1144: How Income Share Agreements (ISAs) are solving education financing & aligning incentives in a broken system with Meratas CEO Darius Goldman | Rising Stars of SaaS 7
Nov 25, 2020
Darius Goldman, CEO of Meratas and former distressed debt lawyer, discusses the transformative potential of Income Share Agreements (ISAs) for education financing. He explores how ISAs align incentives between students and investors, shifting the focus to job placement and skills-based learning. Goldman critiques the shortcomings of traditional financing models and highlights the misconceptions surrounding ISAs. The chat dives into the future of education financing post-pandemic and the importance of community-centric models for maximized economic benefits.
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Darius Goldman's Background
- Darius Goldman's parents prioritized education, enabling him to attend college and law school.
- He worked with hedge funds and distressed debt before founding Meritas.
ISA Origins
- The initial ISA concept originated with Milton Friedman in 1955 to remove government from education funding.
- Yale's first ISA program in 1970 failed due to high earners buying out and group accountability.
Yale ISA Failure
- Yale's ISA experiment failed because high earners bought out, leaving low earners.
- This created group accountability, similar to public education, and removed individual responsibility.