So what’s the overall process for providing seed funding for a microschool?
The first step is choosing among Microschool Revolution’s three different options to start microschools:
Program Related Impact Investing loans that return to you
Program Related Impact Investing loans that stay in a self-refreshing fund for future new microschools
Specify any criteria for the types schools you’d like to fund.
If making school startup loans (rather than grants), choose an interest rate.
Determine the total fund size.
We will bring you applicants meeting your criteria. You choose which ones to support.
Typically, a new microschool will need $100k to start and make it to breakeven, usually in the second year. Additionally, Microschool Revolution requires an additional 15% ($15k) to service the grant/loan and provide startup support services to grantees during pre-launch and their first year.
Microschool grantees will be required to use our system for tuition payments from families.
Once school begins, an 8% royalty will be taken out of tuition payments (possibly higher for larger loans). 7% will go to pay down the loan balance ($115k plus any accumulated interest charges), and 1% will go to Microschool Revolution for servicing and support.
Depending on the interest rate and school growth rate, we expect loans to be paid back with interest in roughly 7 to 10 years (see attached microschool financial model for details).