How Our Platform Works

Safely Financing Income Share Agreements

Our platform’s primary purpose is to enable the safe financing of ISAs. This helps market participants transact in a transparent and fair environment.

Example Transaction

1. Code Academy accepts 150 students into their 2020 coding course. Attending costs $20,000 and students have the option to use an ISA to finance their education.

 

2. 125 students sign ISAs to finance their education. After graduating, they will pay 17% of their income to Code Academy for 24 months. If their income is less than $50,000, their payments are temporarily paused. Their obligation ends after making 24 payments or meeting the $30,000 payment cap. Finally, after 5 years, regardless of how much they have paid, their obligations under the ISA end.

 

3. Code Academy comes to our platform to finance the cost of educating these students. Code Academy faces a timing mismatch between the current expense of educating students and future revenues that will only be realized over the next 2 – 5 years. To finance their current expenses, they can use our platform to pool the 125 signed ISAs and sell portions of this pool to ISA investors.

4. ISA investors come to our platform to buy portions of the Code Academy ISA pool, which is made up of 125 signed ISAs. An ISA investor buying 10% of the ISA pool gets a flow of payments equaling 10% of the payments made by graduates in the pool over the 5 year term of the ISAs.

Our approach has 3 main pillars: qualified market participants, a transparent sales process, and appropriate disclosure.

Qualified Market Participants

Every market participant must be approved in order to access our platform.

We require schools to have an established track record of systematically originating quality ISAs. We help ensure that such standards are maintained and interests remain aligned by using a “skin in the game” requirement. This means sellers retain a meaningful financial interest in the pools ISAs that they finance through our platform.

We require investors to be accredited individual or institutional investors.

Transparent Financing Process

Every offering undergoes a systematic pricing process to help ensure that our market remains fair and trustworthy.

Financing terms are determined using a competitive process designed to reveal efficiently priced transactions.

Our platform gives all investors the same information via the disclosure process and gives no investor any proprietary information that is not shared by all investors.

Appropriate Disclosure

Every offering is accompanied by a detailed disclosure. This provides information about, inter alia, the ISA origination process, past performance of the school’s ISAs, how the school will retain exposure to the financed ISA, and comprehensive documentation of the ISA contracts.

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