So you want to start the project you’ve been thinking about.
Something to build skills, to add to your portfolio and maybe even bringing in revenue is a dream for many teens.
But the reality of starting anything is that it’s straight-up hard work.
And it may seem out of reach because many ideas require large upfront capital. If you don’t have the funds or investors to back you, you’re out of luck.
Or so the conventional wisdom goes.
But did you know you don’t need to put down your own money?
You just need to know how to leverage other people’s through financial literacy.
It’s an interesting approach that takes time, research, and a some negotiation skills. But it happens all the time. Here’s what you need to know to get started.
But FIRST
If you are new, welcome to OCE’s weekly newsletter curated for the ambitious youth…here are some articles you missed from previous weeks:
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#1 Grants:
Most people have heard of youth initiative grants – a financial award given to support youth led projects, but they’re not aware of where to apply for it.
So here are 3 major sources:
- Government Programs: Many governments offer grants or funding opportunities for youth-led initiatives in various sectors such as agriculture, education, environment, and social welfare. Example: Youth Take Charge Program (Canada)
- Foundations and Philanthropic Organizations: Foundations and philanthropic organizations often provide grants to support grassroots initiatives, particularly those addressing pressing social or environmental issues. Example: Laidlaw Foundation
- Local Community Resources: Engaging with local community organizations, businesses, and leaders can uncover funding opportunities or in-kind support for youth-led initiatives. Example: Oregon Youth Community Investment Fund
As you can see, your project must meet certain criteria to qualify for a grant, specifically aligning with the goals and priorities of the grant-making entity. Furthermore, grant applications usually require detailed proposals outlining the project's objectives, methodology, budget, timeline, and expected outcomes.
So if your project doesn’t check those boxes, or you don’t want to go through the complexities of applying for multiple grants, look for other options below.
#2 Partnership:
You don’t have money, asset, resources.
But other people do.
Simple enough solution: Bring in partners.
By convincing others of the opportunity, you get to split the risk and the reward with them. This is by far my favorite way of accessing funding.
Let’s say a business has some excess assets that you need sitting on the shelf (ie. Event space, furniture, equipment - you name it), what if you reached out to the owner and repurposed their non-productive asset for your project? You propose a deal to let you use their asset, they get a % of your revenue or new clients you bring into their business.
All of sudden you’ve carved out a path for the owner to monetize their asset and cut yourself into a new project/business line.
Here’s how I do it for my property management biz:
- First reach out to all the communities that have very low occupancy – tons of empty units.
- Tell them I want to help them recoup some of their costs.
- Why don’t they do a deal where I give the owner 50% of all the revenue from the clients I generate, they allow me to use the units for my biz.
- I can even structure this as a fixed payout over a multi-year period based on future revenue, so they have a consistent income.
- Set up security, maintenance system and keep owner in the loop with new clients that come into the community.
What I just did is acquire revenue generating assets without putting out upfront cash and offer a distraught owner a win.
Oh yeah, this structure can be applied to a ton of different projects (not limited to property management). Check out how OCE alumni Lucas Gil started his investing biz with $0 via partnership.
#3 Credit:
Let’s say you have zero money to utilize, no grants to qualify for, no skills to negotiate for it. What do you have left? Access to money through debt.
This is where your credit score comes into play.
A credit score is like a report card for how responsible someone is with borrowing money and paying it back. It's based on things like whether they pay bills on time, how much debt they have, and how long they've had credit accounts.
If I could plead of you one thing, it’d be to learn about building up your credit and intelligent debt use as early as you can.
With an excellent credit score, you not only gain access to funding but also a better rate for insurance and lending terms.
The OCE cohort learned all about building up credit profile, lending terms and the first step to investing - AKA origination last summer through our project with InvestED.
Credit = Powerful Funding Tool.
You don’t need a lot of money to start your project. In fact, you might not need any money at all. What you need is to understand finance.
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PS. Before you build, first learn from those who walk the walk.
We run a summer cohort for ambitious youth (high school and undergrads) to work directly with world-class founders while learning from Silicon Valley leaders. Check out our info session recording.
You can also explore purposeful opportunities through our Impact Internship Opportunities Database.
Get Curious.
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Lena
https://www.openclassroomexperience.com/
