It became clear to me during July, when coronavirus cases spiked at precisely the time they told us it would take a break, that school would not start in September.
Realizing this, I started floating the idea of creating a “microschool,” a concept that sits between two of the most polarizing points on the education spectrum: private school and homeschooling.
Many consider the flight of the rich to private school, combined with the recently uncovered hacking and corruption at elite colleges, as a fundamental breakdown of the fellowship of the American public education system.
[Click to Tweet (can edit before sending): https://ctt.ac/daT56 ]
Every conversation I’ve ever witnessed about homeschooling went to the same place: with people marginalizing it as a wacky, hippie-dippie pursuit that created smart but socially weird kids.
A “microschool” sits between these two options, because in the model — as defined by me — you have a teacher at your home with multiple students.
A microschool, by my definition, achieves the following:
- You remove the social isolation concern of homeschooling.
- You drop the class size dramatically, from the standard 20-30 students down to four to 10.
- During a pandemic like coronavirus, I would guess that every logical person of science would state that smaller is safer (you can research this yourself online).
- You drop the cost of a private school from $30-50k a year to $5-10k.
As an investor in highly disruptive companies, that last point is the one that got me in hot water with the hysterical Twitter mob this past week.
In my blunt, capitalist fashion, I tweeted that I was looking for the best teacher for my microschool. I would beat their current compensation and give anyone who referred me this person a $2,000 gift card to UberEats.
As an early investor in Uber, this last part was considered extra elitist to the salty, radical left on Twitter. That contingent doesn’t give anyone the benefit of the doubt, instead, immediately they make everything about class, wealth, politics, identity politics, and generally dunking on anyone who is easy to hate (which, I’m self-aware enough to know, I am).
Dr. Phil’s producer has asked me to come on (debating that one), and essentially I went viral for 48 hours.
It was a level of attention, for what is a super pragmatic idea, that I didn’t expect, but in reality this flareup feels akin to about 20 minutes and 20 seconds in the life of Kanye West and Trump, respectively.
The punch line of all of this is that the concerns folks had, that I was “stealing” a teacher from other students, and that this was another example of the growing chasm between the rich and poor, flies in the face of, well, math!
First, 95% of the people applying for the position were out of work. Making this $60-70k position with benefits a net new job created in the world.
Second, we elected to give 50%+ of the slots in the school to folks who wouldn’t be able to afford private school.
Third, we are currently in public school. Everyone just assumed because I had some success in the second half of my life that I was an elitist in some $50,000 private school — wrong!
Fourth, and most stunningly, microschools are the opposite of elitist — they are socialist and capitalist at the same time.
- Ten students
- $50,000-$75,000 teacher (all-in cost with benefits, based on the average salary — do some Google searches, teachers are underpaid)
- That’s $5,000 to $7,500 per student, which over 40 weeks (200 days) of school is $25 to $37.50 per student, per day
This model assumes the 10 parents manage the teacher, live in a reasonable distance of the school, and at least one of the 10 families has a backyard or extra space for the students. Even if you add $12-$24,000 to the total cost, say if you wanted to rent a space, you are still at 10% to 20% the cost of a private school.
So, today parents have three options:
- free public school
- $35,000 to $50,000 a year private school
This changes the competitive landscape for education into four options:
- free public school
- $5,000 to $7,500 for a microschool
- $35,000 to $50,000 a year private school
Does anyone believe that inserting a 4th option to schooling options is a bad thing?
Only one group seems to think this is a horrible idea, and it’s not parents or students, it’s the teacher’s unions and the administrators at public schools.
Consider the big picture:
- U.S. outspends every other country in the world on education.
- U.S. trails countries that spend less than us.
- The average American gets paid ~$25 an hour.
- Based on our average hourly wage in America, sending a child to private school is ~2,000 hours of work. In this model, sending one child to a private school would eat up a parent’s entire salary.
- In the microschool model, a parent would have to work — paradoxically — one hour for every day their child went to school (on average). If you made $10 an hour, obviously you would need to work about three hours.
I’m not an expert on education, but I am an expert at identifying and investing in disruptive models — and microschools feel really, really disruptive in the best of ways.
We all want what is best for all of our kids, and we all know that school ain’t starting in September.
Given these universal truths, I suggest we all start thinking creatively and share our learnings while ignoring the crazy, vocal minority of virtue-signaling communists who hate innovation and want their lives run by our dysfunctional government … you know, the same government that has us spending more and getting less from education today, and which is performing in last place when it comes to dealing with the crisis.
Our politicians and institutions are failing us right now, so while we slowly work to fix our broken system my best advice is to be as radically self-reliant as you can — and that’s what #microschools are.
PS – There is a pandemic pod hack that drops these numbers down even further, which I will write about tomorrow.
For now, if you could hit reply (or comment) and give me your most deeply considered feedback on:
- How to make a microschool more available to more students.
- How to run a microschool better.
- How you are addressing the 2020/2021 educational year.
I started a Slack room called #microschools in my podcast’s Slack, which you can join at:
Two weeks left to score early bird savings at TC Sessions: Space 2020
NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups. We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on […]
NASA just made history by landing a spacecraft on an asteroid. If that kind of technical achievement carbonates your glass of Tang, join us on December 16-17 for TC Sessions: Space 2020, an event dedicated to early-stage space startups.
We’ve launched early-bird pricing, and $125 buys you access to all live sessions, plus video on demand. Don’t procrastinate. Buy your pass now before the early-bird reenters Earth’s atmosphere (and prices go up) on November 13 at 11:59 p.m. (PT).
More ways to save: Go further together with early bird group tickets ($100) — bring four team members and get the fifth one free. We also offer discount passes for students ($50) and government, military and non-profits ($95). Looking for out-of-this-world exposure? An Early Stage Startup Exhibitor Package ($360) includes four tickets, digital exhibition space, a pitch session to attendees and the ability to generate leads. Bonus savings: Extra Crunch subscribers get a 20 percent discount.
TC Sessions: Space is an unrivaled opportunity to learn from, connect and network with boundary-pushing founders, investors and officials from NASA, the Aerospace Corporation, the U.S. Air Force and leading space companies spanning public, private and defense sectors.
We’ve packed the conference with outstanding presentations, fireside chats and interviews. Plus, you’ll find breakout sessions on specialized topics, audience Q&As with Main Stage speakers and the expo area for partners and early stage startups.
Here’s a taste of the topics but keep an eye on the agenda, because we’ll add more speakers and sessions in the coming weeks.
Asteroid Rocks and Moon Landings
Lisa Callahan, vice president/general manager of commercial civil space at Lockheed Martin Space, discusses all aspects of scientific and civil exploration of the solar system — from robots scooping rockets from the surface of galaxy-traveling asteroids, to preparing for the return of humans to the surface of the Moon.
Sourcing Tech for Securing Space
Lt. General Thompson is responsible for fostering an ecosystem of non-traditional space startups and the future of Space Force acquisitions, all to the end goal of protecting the global commons of space. He’ll discuss what the U.S. looks for in startup partnerships and emerging tech, and how it works with these young companies.
Bridging Today and Tomorrow’s Tech
Corporate VC funds are a key source of investment for space startups, in part because they often involve partnerships that help generate revenue, and because they understand the timelines involved. SpaceFund’s Meagan Crawford and Lockheed Martin Ventures’ J. Christopher Moran discuss how these funds fit in with more standard venture to power the ecosystem.
TC Sessions: Space 2020 takes flight on December 16-17, but we’re starting our early bird countdown right now. Great savings disappear in two weeks on November 13 at 11:59 p.m. (PT). Buy your early bird passes today and celebrate your savvy shopping with a tall glass of Tang.
Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.
Leon Black offers more details on ties to Jeffrey Epstein – Update
Apollo chief executive raised the issue after questions swirled about his relationship with the late financier
Leon Black, the billionaire chief executive of Apollo, on Thursday, 29 October, offered a history of his ties to the late financier Jeffrey Epstein, his most detailed public account yet of a relationship that sparked renewed concern among his firm’s shareholders and fund investors in recent weeks.
Epstein was indicted last year on federal sex-trafficking charges involving underage girls.
On a call to discuss the private equity firm’s third-quarter earnings, Black said he wasn’t eager to speak publicly about his personal business, “but this matter is now affecting Apollo, which my partners and I spent 30 years building, and is also causing deep pain for my family.”
The Apollo chief reiterated that he paid Epstein millions of dollars annually to provide professional services to his family partnership and other family entities, “involving estate planning, tax, structuring of art entities and philanthropic advice” from 2012 to 2017.
He said there was substantial documentation of the work and that it was vetted by law firms, accounting firms and other advisers.
“There has never been an allegation by anyone that I engaged in any wrongdoing, because I did not,” Black said. “And any suggestion of blackmail or any other connection to Epstein’s reprehensible conduct is categorically untrue.”
Black also re-emphasised that Apollo never did business with Epstein, who died by suicide in jail in August 2019, the New York City medical examiner found.
The speech came after the three Apollo board members to who make up the New York firm’s conflict committee last week hired law firm Dechert to conduct an independent review into Black’s business with Epstein. Black said he asked for the review and is cooperating fully.
The moves were prompted by a New York Timesreport on 12 October that Black had paid Epstein at least $50m — more than previously known—in the years after Epstein was convicted in 2008 of soliciting prostitution from a teenage girl.
The article didn’t present any evidence that Black participated in inappropriate activity, but it sparked concern among some of Apollo’s public-pension fund investors and has weighed on the company’s shares.
Apollo’s shares rose briefly after Black’s statement but later fell about 1% in morning trading Thursday, 29 October.
Black, who co-founded Apollo in 1990, said he met Epstein around 1996 when Epstein was advising a number of prominent clients on estate-tax planning. The adviser had been named a trustee of Rockefeller University and served on the Council on Foreign Relations and the Trilateral Commission.
In his network were “luminaries I respected and admired, including several heads of state, heads of prominent families in finance, a US treasury secretary, accomplished business leaders, Nobel laureates, acclaimed academicians and noted philanthropists,” Black said.
The Apollo chief said he wasn’t aware of Epstein’s criminal conduct until it was reported in late 2006 that he was under investigation by state and federal authorities in Florida.
In 2007, Epstein signed a federal nonprosecution agreement, which has since been scrutinised, to resolve that investigation, pleading guilty the following year to two state prostitution counts. He spent much of his 13-month sentence outside prison.
After his release, Epstein went back to his financial-advisory work and once again began associating with prominent people from finance, academia, science, technology and government, Black said. He said he didn’t learn the extent of the further allegations about Epstein’s conduct in 2018 until after he had already stopped working with him.
“Like many other people I respected, I decided to give Epstein a second chance,” he said. “This was a terrible mistake. I wish I could go back in time and change that decision, but I cannot.”
Whether Black’s explanation and the independent investigation will be enough to satisfy the firm’s jittery investors remains to be seen. Working to Apollo’s advantage is the fact that big pension funds, which typically need to invest large sums of money, have relatively few options for where to do so. And Apollo’s funds have continued to offer them strong returns.
Any defections among investors could theoretically threaten the firm’s goal set last year of reaching $600bn in assets over the next five years. For now, growth in the metric is chugging along. The firm said that assets climbed to $433.1bn in the third quarter, up from $413.6bn in the prior quarter and $322.7bn a year earlier.
Apollo chief financial officer Martin Kelly said the firm’s assets were durable even if the independent review of Black has an impact on fundraising. He noted that 60% of Apollo’s assets are in permanent-capital vehicles—pools of money that don’t need to be constantly replenished—and 90% are either in permanent-capital vehicles or funds with five years or longer from inception.
Kelly said the firm expects some of its investors will pause new commitments until the independent review has been completed. But even if Apollo raises no additional third-party capital this year, its fundraising of $18.4bn from third parties through 30 September already falls within its typical annual range of $15bn to $20bn, he said.
“We have incredibly long and durable relationships with our clients,” Apollo co-founder Josh Harris said on the call. “We’re deeply in contact with them, and obviously they are awaiting the results of the review Leon discussed.”
In response to an analyst question about how long the review would take, Apollo said it hoped the process could be completed by the end of the year, but that it was in the hands of the conflict committee.
Apollo also reported lower net income and distributable earnings for the quarter. It posted net income of $272.4m, or $1.11 a share, down from earnings of $363.3m, or $1.63 a share, a year earlier. The decline was primarily driven by a bigger loss attributable to noncontrolling interests.
Fee-related earnings were a bright spot, climbing 30% year-over-year.
Apollo invested a net $20.9bn across its various investment platforms during the quarter, a metric that reflects investments in vehicles beyond traditional drawdown funds.
The firm said it would pay a dividend of 51 cents per share versus 50 cents a share for the third quarter of 2019.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers
The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion). Brunel is one of eight pooled Local Government Pension Scheme funds in the U.K.
Alternative Investments/ESG: Brunel Allots £1.2B ($1.55B) Sustainable Mandate To Three Managers
The Brunel Pension Partnership Limited (Brunel) launched a new Sustainable Equities Fund for local authorities’ pension funds.
The Brunel Pension Partnership has picked Ownership Capital, RBC Global Asset Management, and Nordea Asset Management to manage its new Sustainable Equities Fund of around £1.2 billion ($1.55 billion).
Brunel is one of eight pool Local Government Pension Scheme funds in the U.K.
The sub-fund mandate is on behalf of 10 local government pension scheme funds. They wanted a listed equity portfolio with a pronounced skew in favor of ESG considerations. The emphasis would be on companies with positive ESG performance rather than negative exclusions. (Institutional Asset Manager)
Multi-manager sustainable fund
Brunel shortlisted the three managers from 70 expressions of interest.
“The three managers we appointed share a broad investing style and a prioritization of sustainability, yet their approaches are also different enough to provide clients with the diversification they were looking for,” said David Cox, Head of Listed Markets at Brunel.
“We were delighted to find managers who share our understanding of sustainability, embedding it deep into their culture and investment processes,” says David Jenkins, Portfolio Manager for the Sustainable Equities Fund. “This portfolio, therefore, meets our aspiration to go beyond traditional Responsible Investing and ensure that the managers are engaged with the companies and are investing in them for positive reasons, not simply focusing on negative exclusions.”
The portfolio is significantly underweight to the GICS energy sector. It also features an aggregate carbon intensity that is significantly lower than its benchmark, the MSCI All Country World Index.
The selected managers will integrate ESG considerations into their whole investing process. Their focus will not be to manage ESG risks – rather to positively seek out exposure to companies on a sustainable path.
In the process, they would also generate a suitable financial return.
Related Story: Insurers Take a Fancy To ESG & Sustainability ETFs (Invesco)
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