Biden’s Policies toward higher education

The 27th of April, Biden announced the 1.8 trillion budget named the “American Families Plan”, it includes a substantial amount of resources toward higher education, a total of 290 billion dollars to be exact, which includes the following:

  • $109 billion will be destined towards two years of tuition for students attending community college (including Dreamers), this was one of Biden’s proposals during his campaign.
  • 62 billion to colleges and universities for programs that fulfill and attach student retention, and therefore reduce the dropout rate.
  • $39 billion for two years of tuition subsidies for students attending minority-serving institutions (MSIs) whose annual family income is under $125,000. This includes HBCUS (Historically Black Colleges and Universities) let’s keep in mind that the VP, Kamala Harris is a graduate of the HBCU.
  • Hundreds of millions of dollars to enhance institutional capacity and student support services at community colleges and minority-serving institutions (MSIs).

By now we know, that the Biden administration intends to make education one the most urgent matters to take on forward during his mandate, particularly regarding colleges and universities. Here are some of the reasons why the higher education system will be one of the sectors mostly benefited during the next four years:

  • The Biden administration will be putting a lot of effort and resources into community colleges. You’ll see the first lady Jill Biden being part of this subject, she has been a community college educator for years.
  • “We’re rebuilding our entire education system, and now is our chance to actually put into practice the policies that we know will help our low-income children and our children of color.” Joe Biden
  • POTUS, being a member of the democrat party, and with one of his campaign slogans being “Build Back Better” is safe to say, that equity towards education is going to be his main premise.

“Just imagine how much more creative and innovative we’d be if this nation held the historically Black colleges and universities to the same opportunities, and minority serving institutions had the same funding and resources of public universities to compete for jobs in industries of the future.” Biden.

If you are a member of a community college, MSI, or college and university in general, our startup Linc Learning Inc., which is an LMS that digitalizes tutoring programs within colleges and universities could really help, feel free to contact us at https://linc.io/request-demo. Our main objective is to increase the student’s retention rate by automating tutoring centers to be more effective. Our control panel generates reports and statistics, which will provide useful information for better decision-making at your institution.

COVID-19: Linc for Online Learning

Our community has always been our top priority. We understand the concern and uncertainty you may be experiencing due to the coronavirus pandemic. At Linc, we are committed to effectively serve all the needs of our users as the situation evolves.

We encourage you to use the Linc Web Platform to take your online sessions, especially if your institution has decided to move classes online. It’s really easy to get started with online sessions. See how it works.

If you must meet for in-person sessions, we ask you to take extra care by following the Centers for Disease Control and Prevention recommendations to protect against COVID-19.

If you need assistance, please don’t hesitate to reach out to us.

Sources of financing for entrepreneurs

The road for entrepreneurs is uphill, but it’s possible!

A venture can be easy, the complicated thing is to keep it alive and find the resources to finance it.

According to the “INEGI”, the life expectancy for new enterprises in Mexico is discouraging, 75% of Mexican enterprises close within two years of being born. Annually, 1.1 million businesses are created, but 884,000 die.

According to a study by The Failure Institute.

65% of companies in Mexico fail to have sufficient income to survive, and 38% have financing problems. That is why, we’ll introduce you to the top five main sources of financing for entrepreneurs:

1) Bootstrapping: It means paying the startup expenses without seeking external financing for a determined period of time, usually at early stages. This financing option is very common among young entrepreneurs, since they usually have no financial responsibilities and they can finance the start of their project themselves.

Advantages: you don’t have to report to any investor, and when you look for investment your startup will be better valuated, meaning you’ll have more leverage to negotiate. 

Disadvantages: it can be very exhausting for the entrepreneur and could be months or years without receiving a salary or a stable income. 

2) Friends and Family: This financing option is when the entrepreneur validates his business model and sells the idea to his friends and/or family, usually they are the closest people in his/her social circle.

Advantages: it can be very fast.

Disadvantages: since they are not used to making investments, or in the venture capital environment, they may want to participate in the operation of the company, that may result in inappropriate advice.

3) Angel Investors: They are natural figures within the ecosystem of entrepreneurship. In addition to providing capital to companies, they also contribute know-how, which is why their investment is known as smart money. They can contribute ideas /advice and open new window of opportunities.

Advantages: they can take the role of mentors.

Disadvantages: the amounts invested can become limited and they usually seek to participate in the board of directors of the startup (it can be good or bad).

4) Venture Capitals: Venture capital funds are the ones that usually invest in startups in early stages, whose potential and risk are high. In return, the entrepreneur sells a share percentage of the venture.

Advantages: Validate your business model and certify that your project is on track (due diligence).

Disadvantages: If your company does not have a validated product market fit or you are an entrepreneur with little experience, you may not be able to defend the valuation for the money you are trying to raise and you may end up giving up a large percentage of your company.

5) Credit: Traditional credit that you request at a financial institution. Financial Institutions have loans for small, medium and big enterprises.

Financing amount: 20,000 to 3 million Mexican pesos. According to CONDUSEF, interest rates can range from 6.6% to 24%.

Advantages: You decide completely the use of the resources loaned from the bank.

Disadvantages: The banks always win! if your venture fails, you will still have to pay the money loaned.

These are just some of the financing options entrepreneurs can find.

The future generations

As you hear a lot of times “The new generations are the future of our country” that is why, at Linc, we are dedicating a whole blog to pay tribute to students that in some way have thriven and achieved something worth mentioning. We’ll call these students “Linc’s Outliers”. 

The first student we’ll pay tribute to is Imanol Daran, student from one of Linc’s partners, Tecnologico of Monterrey campus San Luis Potosi. 

With just 22 years, Imanol is developing startups based on machine learning and artificial intelligence. He is the founder of six startups: three based on AI (artificial intelligence), one in augmented reality, one in tracking components and one based in block chain technology. 

Imanol is currently the CEO of Neuron, which is the holding company who operates all six startups, and develops software for third parties.

Imanol wishes to become one of the first entrepreneurs in Mexico to achieve with one of his startups the status of “Unicorn” which is the name venture capital firms have referred to startups who are valued one billion dollars or more. 

We asked Imanol: What advice would you give students, who in some way are starting their own project? “I would tell them to not be afraid to start their venture and to prioritize what they feel is the most important project at the moment, it does not matter if a student/ entrepreneur takes more than the usual time to graduate, as long as they are being productive with their time and resources.”

Imanol is the clear example that you don’t have to wait until you graduated from college to start doing what you love, he started creating hardware innovations since he was 9 years, and he hasn’t stopped ever since.  

Imanol wishes to inspire all students, to start doing what they love and to not wait until they are older to start their own company. As you can see from Imanol’s testimony, being and entrepreneur does not have a minimum or restriction of age. 

From B2C to B2B

Did you know that Linc started as a business to client (B2C) business model? What does this mean? It means we were hoping to be like the “Uber” of tutoring. It seemed like a great idea at the time, we had a service idea with high demand and no one was addressing it. Except for the same tutors that almost half the students were always fighting to get a spot on their agenda, not to mention a bit expensive those lessons. So, everything looked like it would work, we had our business plan; gather all the tutors of the city sign them up at Linc and start earning a percentage of each lesson that was given throughout the Linc App. The plan was working so well that in just the first few months we had over one hundred verified tutors in the Guadalajara metropolitan area.

We had enough supply but there was not enough demand just in one city. We needed to expand at least to the biggest four cities in Mexico to be in a good place sales-wise. After a bunch of burned cash in expensive publicity campaigns, we decided to reconsider if the path we were chasing as entrepreneurs was even the right one. After careful thought, we decided to incorporate a new way of selling our services as business to business (B2B). The transition was fast and in no time, we were only focused on growing our platform and making sure our service to the universities was the best always.

The lesson learned here is that the life of an entrepreneur is kind of like a rollercoaster, both scary and fun at the same time. And if you want my personal advice. Never stand too close to your project, be open about the idea of innovation within your project.

The key points for entrepreneurs

Mexicans, in general, are people that like to move forward and fast (business wise). Which in the world of entrepreneurship and startups is a quality, as long as we consider some factors that are essential to avoid future headaches.

The first factor to consider is: how will I monetize my idea? or how will my business model be carried out? Many times, entrepreneurs have a great idea, but when they question what will be their revenue stream, it could be a little complicated.

One of the advantages of living in an emerging country, such as Mexico, is that possibly many of the ideas that you can think of for your new venture, could already exist in other countries, therefore, you could take on some factors and apply them to your idea in order to get an improved product or service that can relate to your product market fit. It is not always necessary to invent something completely new, we could innovate and improve an existing product or service using better resources and technology.

One of the factors that can decide on the success or failure of your startup is the team of co-founders. From my point of view, the team is the most important element, even more, than the idea itself. The team is what will define the DNA of your startup, we must be very accurate in knowing who we are going to invite to the adventure of starting your own business. 

In all startups, there are two types of partners or shareholders, the ones who will work in the everyday operation and the ones who invest their money or required capital for the company to start.

The recommendation is as follows: Regarding the partner or shareholder you are going to invite to be working with you in everyday operation, make sure that their skills and yours complement each other and that he/she is willing to give one hundred and ten percent of his/her skills and abilities. Entrepreneurship is not an easy task! Something that VC and investors look for is a co-founding team that is a multi-disciplinary. 

Regarding the shareholders or partners that invest their money, it is important that you do not only look for investment for your startup, but also that the shareholder can contribute to your project and open doors that you as an entrepreneur can not open, either due to your lack of experience, know-how, contacts, etc. Make your goal for capital investment smart money, at least for your lead investor.

When you have defined your revenue stream and who will be your partners, it is time to define, what will be your source of funding?

Regardless of getting government funds, borrowing from a financial institution, applying for 0% loans of government funds or registering and winning international entrepreneurship contests where winners receive money, the most common source of funding among entrepreneurs is bootstrapping, which means starting your startup with your own funds, to later get investment from third parties in exchange for participation in your startup.

When we cannot afford to start with our own resources, the steps of investment or financing in exchange for participation in your startup usually are the following:

  • Friends and family: in this financing stage, your family and friends like your project and decide to invest. Average ticket 500,000 MXN.
  • Seed Capital: in this stage of financing, you are looking for smart money investors, boutique investment funds and family offices to validate your sales model even further and increase it. Average ticket 1,000,000 MXN.
  • Series A: the main investors are Venture Capital Funds VC, the company is expected to grow in terms of both its labor and corporate governance structure, the startup already has substantial traction. Average ticket of 5,000,000 MXN.
  • Series B, C, D…: the exponential growth of the startup is sought, with the purpose of listing on the stock market or looking for an exit by a larger company. Average ticket over 10,000,000 MXN.

These are the basic stages of the life of a startup, as an entrepreneur and lawyer I recommend that all stages are supported with the necessary legal documentation, to protect the rights of the founders, as well as to offer certainty to the future investors.