What do you do when you are sick of school, want to jumpstart your business idea but have no way to fund it?
Simple — auction off a portion of your paycheck for the next ten years.
That’s exactly what Seattleite Sarah Hanson just did, and now the 19-year-old has $125,000 in cash to pay off her college debt and fund her startup, Senior Living Map.
The developer who’s been coding since she was 12 years old doesn’t necessarily hate the college experience — “I go to a good school, with good teachers, and have made some good friends,” Hanson writes — but she realized that a degree won’t be of much help to Senior Living Map, a map-based senior living search engine that Hanson built herself.
So Hanson pitched an offer on 32auctions.com. The terms: Once a year for the next ten years, Hanson will provide an investor with a check for 10 percent of her after-tax income, using a tax form to prove that she has provided the proper amount to the investor.
“It doesn’t matter where the income I receive comes from, whatever the after tax sum is for each year, the investor will see 10 percent of it,” Hanson said.
Sure enough, after sending 1,000 investors from angel.co messages, she found a San Francisco-based investor willing to put down $125,000 to Hanson.
If the 10 percent for 10 years ends up being less than $125,000, “then it ends up being less,” Hanson said.
“The main catch of the agreement is that if I don’t provide the 10 percent each year, the investor will have the rights to my ownership of Senior Living Map, which I currently own 100 percent of,” she said. “That’s pretty strong motivation for me to make sure the investor receives the 10 percent each year.”
Hanson said she plans on finishing out her college term and then use the fresh funds to pay off her college debt and begin focusing on building out Senior Living Map, which she created after struggling to find her grandmother an assisted living home. The website hosts 32,146 listings and is the most comprehensive map-based senior and assisted living search engine.
She has plans to monetize the site later on, but for now, Hanson is concentrating on making the platform more robust with reviews, testimonials, interior photos, pricing, etc.
“Long term, my goal for Senior Living Map is for it to be the number one resource online for anyone seeking senior living options,” she said.
With a good idea and a nice little financial cushion now, she’s certainly on her way.
UPDATE: We’ve reached out to both Hanson and 32auctions to find out more specific details about the $125,000 transaction.
Previously on GeekWire: This 16-year-old is spearheading Seattle’s first biotech hackerspace