October 5, 2010

Human Stock Market: How to Do This?

So, I want to do this. Or at the very least, figure out it's impossible and give up.

Here's the premise. I love what Kiva's now doing in terms of student loan micro-lending. Having donors provide children with no-interest loans that are repaid upon completion. But, even if Kiva keeps their maximum gift at $25, like they do with their other loans, you're waiting a long time before you get repaid.

Which is fine. But, I'm nervous that the repayment period may scare people away. So, what if we add some risk/reward to the possibility?

Hence my original Human Stock Market idea from a few years ago. You invest in the person. Not the business. The idea-maker. Not just the one idea.

You invest in a promising child's education or other funding, and receive a small share of that person's life earnings. The person becomes the corporation. The share entitles you to a percentage of their net income.

So, here's the problem? Because this isn't going to work if it's on a honor-basis. How could I do this without insane regulation? I would just have to confirm their personal tax statements each year, right? But obviously, the person could funnel money into corporations and other businesses. How could this work?

As far as Justin's question to how share prices are decided. That's for the market to decide. The person could release an IPO at a set price. But based on the factors you mentioned, demographics, resume, parental successes (genetics), goals and dreams, the share price of funding your kid and another kid would assuredly be different.

Help people. If we figure this out by the end of the week, I'm starting it.