Ask HN: What if teachers invested in students instead of charging tuition?
29 comments
What about all the people who don’t go on to start their own businesses? Do they not get taught?
What about folks who go on to be teachers? Sounds like a pyramid scheme with extra steps.
It’s not a pyramid scheme because it’s ultimately grounded in real value: equities in companies, which themselves are grounded in revenue.
If someone becomes a teacher, they would earn equity in their own students’ personal tokens. When those teachers eventually realize gains by selling shares, their own teachers (as shareholders) share in that upside too.
And if the teaching doesn’t actually create value, then everyone in that chain loses, which keeps the system honest.
If someone becomes a teacher, they would earn equity in their own students’ personal tokens. When those teachers eventually realize gains by selling shares, their own teachers (as shareholders) share in that upside too.
And if the teaching doesn’t actually create value, then everyone in that chain loses, which keeps the system honest.
You just described a Ponzi scheme. You know that, right?
https://knowyourmeme.com/memes/theyre-the-same-picture
https://knowyourmeme.com/memes/theyre-the-same-picture
This also applies to people who join companies and receive equity as part of their compensation. So initially, it’s most applicable to those who are likely to earn equity in the future — whether by starting a company or joining one.
Over time, though, I see it spreading to more domains as venture-backed models expand. For example, more researchers now get equity upside because more companies are being built around various kinds of research.
Over time, though, I see it spreading to more domains as venture-backed models expand. For example, more researchers now get equity upside because more companies are being built around various kinds of research.
Why would I want to rob from my future self like that?
How many teachers might one have? What good is the equity if all of it is being siphoned off by past teachers. I’d much rather pay a once than have that hanging over my head my whole life. Buy-once cry-once.
I could see people on track to get significant equity looking to buy their way out of this indentured servitude.
How many teachers might one have? What good is the equity if all of it is being siphoned off by past teachers. I’d much rather pay a once than have that hanging over my head my whole life. Buy-once cry-once.
I could see people on track to get significant equity looking to buy their way out of this indentured servitude.
I see it the same way I see selling equity in a company: I want to incentivize people to help me win. I’d only raise from those who grow the pie larger than the share they take.
If giving up 1% to a teacher-investor helps me create 10x more value, that’s a fantastic deal. Without factoring in their impact on outcomes, it’s misleading to call that “robbing.”
And let’s be clear about what’s actually at stake. If I sell equity in a company for $10M, and a teacher owns 1% of my personal token, they’d receive $100k — only at that exit event. Compare that to owing a bank $200k in student loans right after graduation, regardless of outcomes.
It’s also not indentured servitude: there are no guaranteed repayments, I keep full agency, and personal tokens could allow “ejection” of shareholders if needed. Startup founders don’t see themselves as servants of their investors, and neither should students.
And honestly, I wouldn’t even want to buy back equity from investors who are actively helping me win. I’d rather keep them incentivized to keep contributing. (Of course, if they stop actively helping me I would want to buy back shares from them because they are deadweight). I think this could be implemented in a way that gives such control to the individual (e.g., you can buy back shares whenever).
If giving up 1% to a teacher-investor helps me create 10x more value, that’s a fantastic deal. Without factoring in their impact on outcomes, it’s misleading to call that “robbing.”
And let’s be clear about what’s actually at stake. If I sell equity in a company for $10M, and a teacher owns 1% of my personal token, they’d receive $100k — only at that exit event. Compare that to owing a bank $200k in student loans right after graduation, regardless of outcomes.
It’s also not indentured servitude: there are no guaranteed repayments, I keep full agency, and personal tokens could allow “ejection” of shareholders if needed. Startup founders don’t see themselves as servants of their investors, and neither should students.
And honestly, I wouldn’t even want to buy back equity from investors who are actively helping me win. I’d rather keep them incentivized to keep contributing. (Of course, if they stop actively helping me I would want to buy back shares from them because they are deadweight). I think this could be implemented in a way that gives such control to the individual (e.g., you can buy back shares whenever).
> only at that exit event.
What if there is no exit event? So if the student decides to run a profitable company, the teacher that owns a share doesn’t get a cut of the profits? I’d expect the teacher to get a distribution any time the student does.
> Startup founders don’t see themselves as servants of their investors, and neither should students.
I haven’t founded a startup, but I’ve seen enough startups I’m a customer of take on funding from investors. Incentives change. They nearly always cave to pressure to produce more profit, so the investor can make their money back, even at the expense of the vision for the company or the long term health of the business. They are also more likely to seek an exit than to build and grow the company for the long-haul. That’s the deal when the investor invests.
As a student grows, they require different teachers. Your freshman accounting professor isn’t going to be the one helping you sort things out for a billion dollar company. If they are cut off as deadweight, it undermines the whole concept, as they were still a building block to get you to where you are.
For teachers, it just feels like a perverse lottery. Go for volume and hope one pays off.
What if there is no exit event? So if the student decides to run a profitable company, the teacher that owns a share doesn’t get a cut of the profits? I’d expect the teacher to get a distribution any time the student does.
> Startup founders don’t see themselves as servants of their investors, and neither should students.
I haven’t founded a startup, but I’ve seen enough startups I’m a customer of take on funding from investors. Incentives change. They nearly always cave to pressure to produce more profit, so the investor can make their money back, even at the expense of the vision for the company or the long term health of the business. They are also more likely to seek an exit than to build and grow the company for the long-haul. That’s the deal when the investor invests.
As a student grows, they require different teachers. Your freshman accounting professor isn’t going to be the one helping you sort things out for a billion dollar company. If they are cut off as deadweight, it undermines the whole concept, as they were still a building block to get you to where you are.
For teachers, it just feels like a perverse lottery. Go for volume and hope one pays off.
> What if there is no exit event?
Teachers can still realize returns through secondary sales (with the student’s approval). In that case, the student gives up nothing (their life isn’t affected) while the teacher profits. That’s why I framed “giving up” only around equity sales by the student because only that results in the student "giving up" something. But from a teacher’s perspective they can clearly profit without requiring the student to give something up.
> They nearly always cave to pressure to produce more profit, so the investor can make their money back, even at the expense of the vision for the company or the long term health of the business
That happens in companies because investors hold voting rights and can push out founder(s) or make decisions about the company. With personal tokens, shareholders have no control: they can’t fire you, push you toward an exit, or override your vision. If someone becomes toxic, you could buy back their shares at market price and even cut off contact. Personal tokens are designed to keep individuals in full control. Unlike company shareholders, personal token shareholders don’t “own” you.
> If they are cut off as deadweight, it undermines the whole concept, as they were still a building block to get you to where you are.
Agreed. Unfair ejections would kill trust. That’s why all actions would be transparent. If a student ejects a teacher without clear justification, they’d damage their reputation and likely struggle to raise in the future. Transparency is what keeps the system honest. But even in an unfair rejection, the student would have to pay market price for that equity (or get a new investor that buys from the investor they are ejecting). Assuming the student’s value has gone up, then the ejected investor would still profit.
> For teachers, it just feels like a perverse lottery. Go for volume and hope one pays off.
In the same way the best investors don’t see startup investing as a lottery but as a skill: where you won’t bat 100%, but you can be orders of magnitude better than average. Great teachers would have a knack for identifying and developing talent and won’t view this as a lottery. And for teachers who don’t want to play this game, nothing changes: they can keep teaching in the current system. This is about adding another option.
Teachers can still realize returns through secondary sales (with the student’s approval). In that case, the student gives up nothing (their life isn’t affected) while the teacher profits. That’s why I framed “giving up” only around equity sales by the student because only that results in the student "giving up" something. But from a teacher’s perspective they can clearly profit without requiring the student to give something up.
> They nearly always cave to pressure to produce more profit, so the investor can make their money back, even at the expense of the vision for the company or the long term health of the business
That happens in companies because investors hold voting rights and can push out founder(s) or make decisions about the company. With personal tokens, shareholders have no control: they can’t fire you, push you toward an exit, or override your vision. If someone becomes toxic, you could buy back their shares at market price and even cut off contact. Personal tokens are designed to keep individuals in full control. Unlike company shareholders, personal token shareholders don’t “own” you.
> If they are cut off as deadweight, it undermines the whole concept, as they were still a building block to get you to where you are.
Agreed. Unfair ejections would kill trust. That’s why all actions would be transparent. If a student ejects a teacher without clear justification, they’d damage their reputation and likely struggle to raise in the future. Transparency is what keeps the system honest. But even in an unfair rejection, the student would have to pay market price for that equity (or get a new investor that buys from the investor they are ejecting). Assuming the student’s value has gone up, then the ejected investor would still profit.
> For teachers, it just feels like a perverse lottery. Go for volume and hope one pays off.
In the same way the best investors don’t see startup investing as a lottery but as a skill: where you won’t bat 100%, but you can be orders of magnitude better than average. Great teachers would have a knack for identifying and developing talent and won’t view this as a lottery. And for teachers who don’t want to play this game, nothing changes: they can keep teaching in the current system. This is about adding another option.
This all sounds very messy.
> If someone becomes toxic, you could buy back their shares at market price and even cut off contact.
There are 2 main scenarios here. Either the person doesn’t have the money to buy back the shares, that’s why they would have entered into an agreement like this in the first place. Or they have a lot more valuable now, and they’re paying 100x on their education to try and buy out the teacher.
> If someone becomes toxic, you could buy back their shares at market price and even cut off contact.
There are 2 main scenarios here. Either the person doesn’t have the money to buy back the shares, that’s why they would have entered into an agreement like this in the first place. Or they have a lot more valuable now, and they’re paying 100x on their education to try and buy out the teacher.
1. If the person doesn’t have money, they can bring in a new investor who does see potential. If no one is willing to invest and they can’t afford a buyout themselves, then the “toxic” teacher just stays on the cap table, but the student can disengage personally. As soon as new investors come in, the buyout can happen.
2. If the person has become far more valuable, I don’t see that as a problem. Yes, they might be paying 100x compared to their early valuation, but that’s because their potential has grown 100x. From the student’s perspective, spending 1% of a much larger pie to buy out a teacher (even if toxic) isn’t “robbing their future self”. The real benefit for the student is that they never take on debt. Ever. They are never burdened if they don't become successful (unlike our current system).
2. If the person has become far more valuable, I don’t see that as a problem. Yes, they might be paying 100x compared to their early valuation, but that’s because their potential has grown 100x. From the student’s perspective, spending 1% of a much larger pie to buy out a teacher (even if toxic) isn’t “robbing their future self”. The real benefit for the student is that they never take on debt. Ever. They are never burdened if they don't become successful (unlike our current system).
You invented a new form of debt, that’s all this is. Your answer to response #1 sounds like someone doing a balance transfer to lower their interest rate on a credit card. This 30% rate is toxic, I can move it over here and get 18 months at 0%… when that runs out I’ll do it again, and again…
The current system is broken, but there are some simple fixes that could largely resolve it. This token system adds so many layers of complexity, politics, etc. It shifts the student/teacher relationship into a business relationship.
If people say these 18 year olds are signing up for student loans they don’t understand, this is vastly more complicated. While it’s easy to say it’s optional, there is still going to be a feeling of obligation and debt to that teacher. And that teacher is going to have expectations of the student to pay them back for the time invested… the teacher can’t put food on the table with IOUs that may never pay out. It seems like you’re essentially shifting the burden from the student to the teacher in the short term, and the student has no incentive to to lighten that load, beyond guilt, obligation, or to avoid growing resentment from the teacher over wasted time.
The current system is broken, but there are some simple fixes that could largely resolve it. This token system adds so many layers of complexity, politics, etc. It shifts the student/teacher relationship into a business relationship.
If people say these 18 year olds are signing up for student loans they don’t understand, this is vastly more complicated. While it’s easy to say it’s optional, there is still going to be a feeling of obligation and debt to that teacher. And that teacher is going to have expectations of the student to pay them back for the time invested… the teacher can’t put food on the table with IOUs that may never pay out. It seems like you’re essentially shifting the burden from the student to the teacher in the short term, and the student has no incentive to to lighten that load, beyond guilt, obligation, or to avoid growing resentment from the teacher over wasted time.
i’m a bit confused by the “new form of debt” framing. debt means you owe something back, on a fixed schedule, regardless of outcome. here, there’s no obligation to pay anything “back.” if a student never creates financial upside, they never owe a cent.
the teacher takes the risk. if the student succeeds, both share in the upside. if not, the student walks away free, unlike debt, where you’re burdened for life whether or not the education worked.
where is the debt in this model?
the teacher takes the risk. if the student succeeds, both share in the upside. if not, the student walks away free, unlike debt, where you’re burdened for life whether or not the education worked.
where is the debt in this model?
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It's perverse and disgusting. Also what about lazy students, neurodivergent, or poor people that are most likely not having a good outcome despite learning? In the end even average students would be ignored by the teachers.
What about everyone having the same education? What about not putting capitalism in everything?
What about everyone having the same education? What about not putting capitalism in everything?
Some of the richest people are neurodivergent. Musk, Gates, and Zuckerberg have all said they have or likely have ASD. I’m sure there are more.
I’m not defending the original idea, I’m not a fan, but the right special interest, properly directed, has had made billionaires. These were just 3 examples off the top of my head that I heard in passing over the last couple years.
I’m not defending the original idea, I’m not a fan, but the right special interest, properly directed, has had made billionaires. These were just 3 examples off the top of my head that I heard in passing over the last couple years.
Maybe Musk, Gates and Zuckerberg are neurodivergent, IDK, self diagnosis is often self-serving. I don't think they are billionaires because their powers of autistic hyperfixation were properly directed.
You said there were "just 3 examples of the top of your head" as if there were a much larger pool from which to infer a correlation between autism and wealth. In most cases autistic peoples' special interests don't have million dollar market potential. I suspect the potential for wealth and placement on the autism spectrum are orthogonal to one another, and that factors like education, class and luck play bigger factors.
You said there were "just 3 examples of the top of your head" as if there were a much larger pool from which to infer a correlation between autism and wealth. In most cases autistic peoples' special interests don't have million dollar market potential. I suspect the potential for wealth and placement on the autism spectrum are orthogonal to one another, and that factors like education, class and luck play bigger factors.
This sounds like a scam and teachers get their students jobs and then more people get a cut and these students really get not much…
Students wouldn’t be giving up much: typically no more than 5–10% of their personal token. And importantly, this isn’t tied to income, so nothing in their day-to-day life is taken away.
Dividends only flow to shareholders when the student realizes capital gains (e.g., selling equity in a company), not from salary. Even then, there can be sensible safeguards, like only triggering dividends once total gains exceed $1M.
So students still keep nearly all of their upside, while gaining resources and support they wouldn’t otherwise have access to.
Dividends only flow to shareholders when the student realizes capital gains (e.g., selling equity in a company), not from salary. Even then, there can be sensible safeguards, like only triggering dividends once total gains exceed $1M.
So students still keep nearly all of their upside, while gaining resources and support they wouldn’t otherwise have access to.
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> Alice is strongly incentivized to help her students whenever they need it, because she has equity in their long-term success.
You are assuming that the student will be interested in that help, but you can't force help onto someone. How do you prevent the student just taking the money and doing whatever?
How many students will you have to mentor to get a guaranteed return?
Also, teachers typically don't have that kind of investment money, so would have to get funded themselves for that purpose. How would risk management work along that double-tiered, decades-long funding structure? It seems like a good way to burn a lot of money.
You are assuming that the student will be interested in that help, but you can't force help onto someone. How do you prevent the student just taking the money and doing whatever?
How many students will you have to mentor to get a guaranteed return?
Also, teachers typically don't have that kind of investment money, so would have to get funded themselves for that purpose. How would risk management work along that double-tiered, decades-long funding structure? It seems like a good way to burn a lot of money.
Oh absolutely, these students would be actively applying to be trained by the teacher. And you’re right, the student retains full agency; the teacher can’t (and shouldn’t) control what they do.
As for returns: there are no guarantees, just like in venture capital. The model assumes a power-law distribution — you might mentor many students, but only a few will generate outsized successes. As AI makes outcomes more extreme, this dynamic will likely intensify, which is why equity (rather than debt) is the only model that works.
As for returns: there are no guarantees, just like in venture capital. The model assumes a power-law distribution — you might mentor many students, but only a few will generate outsized successes. As AI makes outcomes more extreme, this dynamic will likely intensify, which is why equity (rather than debt) is the only model that works.
It is a long-term investment, but it doesn’t have to be decades before there’s liquidity. Teachers could sell portions of their equity along the way through secondary sales.
For example, if a student shows strong potential - say they ship a prototype that gains traction online - new investors may want to back them. At that point, the teacher can sell some of her shares to those investors (with the student’s approval), realizing value earlier while still staying aligned with the student’s long-term success.
For example, if a student shows strong potential - say they ship a prototype that gains traction online - new investors may want to back them. At that point, the teacher can sell some of her shares to those investors (with the student’s approval), realizing value earlier while still staying aligned with the student’s long-term success.
Perverse incentives. I don't think education should be optimized for future financial profitability of the student.
In very specific and rare circumstances (like your PG example) it can make sense for post-grad adults.
In very specific and rare circumstances (like your PG example) it can make sense for post-grad adults.
Education is already reduced to financial profitability today — just in a worse way. Tuition and student debt force students to pay up front regardless of whether the education actually helps them succeed.
This flips the incentives: teachers only win if students do. Instead of extracting value at the start, they share in the upside when their students succeed. That seems like a healthier alignment than the status quo.
This flips the incentives: teachers only win if students do. Instead of extracting value at the start, they share in the upside when their students succeed. That seems like a healthier alignment than the status quo.
For ex: Alice, a great designer, could give each of her students capital that the students can use to pay rent, food, products and services to help them design, explore, or whatever (it’s their money!).
But what exactly would Alice get in return? Let’s say we create a “personal token”, an instrument that represents an individual’s potential, with transactable shares, grounded in their equities in companies and other personal tokens (via dividends on capital gains).
So Alice would get shares (equity) in each student’s personal token in exchange for her training + capital.
This would mean:
1. Students don't take on debt. In fact they get paid to learn!
2. Alice is held accountable. If she fails to meaningfully improve her students' outcomes, she loses her investment. This means Alice is forced to adapt her training to what is actually relevant to the world.
3. Teacher-student relationships last years / decades, not semesters. Alice is strongly incentivized to help her students whenever they need it, because she has equity in their long-term success.
But why? AI is making outcomes extreme (power law distribution). We can already feel this in software engineering: AI makes the best engineers far better than the median. As the gap between the best and rest grows, it becomes too risky to finance education with debt for the same reason it’s too risky to finance startups or content creation with debt.
Paul Graham was one of the earliest examples of this model. He didn’t need to guard his knowledge or put it behind a paywall because he had a much more powerful way to capture value: by investing in the founders his essays attracted. If teachers could invest in students, knowledge would spread more freely because sharing knowledge itself would become a funnel for investing. Even students who never raise would still benefit from the higher-quality knowledge that becomes available.
Thoughts?