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					SWAYAM                                                 Business Plan




            SWAYAM
            “People investing in people”




                   Deepti Chatti
                  Ashni Mohnot
                  Thomas Seyller




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SWAYAM                                                                       Business Plan



                     EXECUTIVE SUMMARY
Many students give up on the idea of a higher education in the United States due to their
inability to secure funding or because they believe they will be crippled by the loans they
take. Our aim is to ensure that students who have the desire and the potential to pursue
higher education have access to funds through Swayam. We want to help international
students realize their dreams of obtaining an education and a future for themselves
through future-income contracts.
Future-income contracts are agreements between Swayam and prospective students,
whereby Swayam funds their education and the students pledge a reasonable percentage
of their future income as repayment. The capital required to make this work will be raised
by creating the Swayam Angel Trust, an investment fund focused on funding
international students and which will offer competitive rates of return.

The Need for Swayam
Studies by international organizations such as the UNESCO have highlighted several
crucial problems:
   In a global study of individuals who are eligible to enter higher education, only 24%
      actually enroll. This percentage is even lower in countries like India (10.5%) and
      China (7.5%). Often, lack of capital is the source of this problem.
   Students who do pursue higher education and obtain loans to cover their expenses
      fear being crippled by high repayment amounts.
   Traditional money-lending operations in Asian countries place a disproportionate
      repayment burden on the borrower, where the interest can be as high as 14% and
      compounds over a period of time.

Company Information
Thanks to Swayam (a word which conveys the notion of “self-reliance” in Sanskrit),
investors have the opportunity to support a talented individual’s education through the
Swayam Angel Trust. Swayam offers the money collected through this trust to
promising students for higher-education expenses. Through a Future-Income Contract,
students return a pre-specified percentage of their income over a certain number of years,
once they graduate and start earning. Swayam then channels these funds back to the
investors as return on their investment.
Swayam’s model builds off a Ph. D. thesis on Income Collateralized Loans (percentage-
of-income loans) by Andrew Carver. Swayam’s “unfair competitive advantage” comes
from its core team’s competence in the following areas:
 1. Risk Modeling: Writing future-income contracts requires specialized training in
    decision and risk analysis. Two members of our team are doing a Ph.D. in this area.
 2. Social Marketing: Developing social marketing strategies requires a background in
    sociology and marketing. One of our members has ethnographic research



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SWAYAM                                                                                                          Business Plan


     experience with a special interest in social marketing. Another member has worked
     in Stanford’s Office of Undergraduate Admission and understands the social
     dynamics of admissions offices.
 3. Education policy: One of our members is an education policy graduate with
    research experience in curriculum evaluation for international education systems.
    This experience will help us develop tests for prospective applicants.

Market Analysis
Swayam has two target markets:
   International students with high potential and lack of capital who wish to pursue a
     higher education in the United States;
   Potential investors who are looking for an opportunity to trigger positive social
     change with their money in addition to a solid financial return on their investment.
Within the first target market, we will initially focus on non-funded international
graduate students pursuing higher education in technical disciplines at U.S. universities.
Eventually, we plan to extend our services to students wishing to pursue higher education
anywhere in the world.
                                                                                                    Other
                                                                                                International    1,140
  Fall 2007:        Indian & Chinese
                                                                                                  Graduate
                    Grads at Stanford
                                                                                                  Students
                                                                             170




                                                                                      220


  Fall 2008:        Bay Area International                                         Our new addressable
                    Students                                                       market: 16, 100 students

The competitive landscape is summarized in the diagram below. We show substitutes to
our services (bottom) and threats to entry (top).
                                        En t re p re n e u rs lik e Ca re e r Co n c e p t
                                            (Au s t ria , It a ly, Bra zil, J a p a n )
                                     No n -P ro fit s (e .g . Ro b e rt s o n Ed u c a t io n
                                            Em p o we r m e n t Fo u n d a t io n )




                      In ve s to r                S WAYAM BANK                                   S t ud e nt




                                            Ba n k s , P riva t e Lo a n Ag e n c ie s
                               Go ve r n m e n t Fu n d in g P ro g ra m s (e .g . S in g a p o re )
                                                        Fa m ily Fu n d s



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       SWAYAM                                                                                            Business Plan


       Products and Services
       Swayam will offer two services – one for international students and one for investors.
       Our first product, the Swayam Angel Trust, is an educational investment fund for
       potential investors looking for a good return on their investment. We plan to provide a
       return on two levels; first, a social return for helping educate someone in need and second,
       a monetary return, which, according to our calculations, would exceed 7.5%. For an
       investor looking to do good and to do well, investing in a Swayam Angel Trust will give
       far more satisfaction than investing in stocks or real estate.
       Our second product, the Future-Income Contract (FIC), will provide fund to
       international students for their education in return for a pre-determined percentage of
       their future income. The FIC will be flexible and customized to reflect our estimates
       about the student’s future earning potential. It will reflect our beliefs about overall
       earnings potential in the field of interest, and the individual ability of the student under
       consideration. We believe that the FIC will be an attractive option for international
       students who want peace of mind: they will prefer payments commensurate with their
       income, rather than payments toward a fixed loan amount. Repaying students will
       eventually have the opportunity to become investors themselves.
                                                                            The chart on the left shows our timeline
2 ,5 0 0
             Ne w Un d e r g r a d Co n t r a c t s                         for contracts issued.
                                                             500
             Ne w Gr a d Co n t r a c t s
2 ,0 0 0                                                                    Our intellectual property will consist of: a
                                                                            database of student salaries; a social
1 ,5 0 0                                                                    marketing database which will help us
                                                                            customize our social marketing strategy
1 ,0 0 0                                              220   2 ,0 0 0        for various communities; our FIC
                                                                            generation process; an ethics test to assess
  500
                                      50              750                   the ethical code of an applicant; and
                             15
      0
             6               50      250                                    finally, a mentorship program to connect
           2007        2008         2009          2010      2011            investors with students.

       Operations
       Swayam will develop a rigorous screening process to identify worthy applicants. Some
       key factors will be the field of study, the amount of funding required, the amount of time
       before the student starts working, the country of citizenship, the level of entrepreneurial
       interest and the ethical background.
       All FIC beneficiaries will be connected to mentors. Some of those mentors will be past
       students who have benefited from Swayam and are now paying back; others will be
       investors in the Angel Trust who would like to help the student by passing on job
       contacts, career advice, etc. The mentorship program will add a human dimension to the
       process and will help students realize that a lot of dedicated people are interested in
       helping them succeed.




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SWAYAM                                                                         Business Plan


Once beneficiaries graduate and start working, they will submit their pay stub details to
Swayam, along with a monthly payment which corresponds to the fraction of income
specified in the FIC. Swayam will then deposit a portion of the money collected to the
investors of the corresponding Angel Trust.
Here are the objectives that Swayam will focus on over the next two years:
   2007     Obtaining VC funding for legal fees, hiring a legal team, and developing a
            website showing basic company information
   2008     Obtaining a second round of funding, and designing an online portal so that
            students and investors can interact with Swayam
During 2009 and 2010, we will focus on revenue generation from students, while
continuously updating our website and our income and social marketing databases.

Marketing and Sales
                                          Banks
 2007
                                        Student                             LEGEND
                                       Mailing Lists
                                                                         Investor Funding
                                                                             Channel
 2008                                Investor Portal
                                                                      Future-Income Contract
                                 Student Community
                                                                             Channel
                              Portal & University Tie Ups


                                 Integrated eBay-like Portal
 2011
                           Investor can now also find a student or
                            create a contract for a known student


In this section, we shall examine marketing strategies for the near term, the medium term
and the long term. In the near term, as early as fall 2007, we will begin offering
Swayam’s Angel Trusts through banks: potential investors will invest in our funds
through these banks. Meanwhile, we will reach students through ethnic mailing lists and
contact those who want to stay on for an extra quarter.
In the medium term (fall 2008 onwards), we will launch an online portal for investors and
students. Small investors will be able to contribute funds directly through our website,
while being able to check the performance of the fund in real time. Contracted students
will be able to interact with Swayam through the student portal. After graduating, when
they start earning, the portal will serve as a workflow management system that will
receive pay stub and fund transfer information. We will also help local universities
extend need-blind policies to international students through a special arrangement with
Swayam: if they find students that they wish to fund but are unable to, they will consider
Swayam as an alternative.




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SWAYAM                                                                                Business Plan


In the long term (2011 onwards), we want to become the eBay for education, by helping
investors fund students of their choice. In other words, we will create a bazaar where
FICs can be traded, just like stocks on an exchange.

Value Created for Swayam’s Customers & Social Impact Assessment
Once promising young individuals are given the means to fund their education through
Swayam, their quality of life will greatly improve. Studies have shown that the most
notable benefits include higher lifetime income, increased personal and professional
mobility, more leisure activities, and in many cases enhanced quality of life for their
children and communities. Furthermore, the FICs assure students that their repayment
amounts will be commensurate with their financial means, thus providing peace of mind.
Once students graduate, their professional success will provide a reliable and lasting
source of income to investors who funded their education. Many investors will also relish
the accomplishment of having meaningfully impacted the lives of young, talented
individuals and their communities.
Swayam will use three metrics to evaluate its success: the number of students graduating,
the average earnings of funded students over time, and the rate of return to investors.

Financials
Swayam is looking to raise
$400,000 in an initial round    $ 1 ,5 0 0 ,0 0 0
                                                      Re ve n u e
of funding early in the
                                                      Op e r a t in g Exp e n s e s
summer of 2007. This            $ 1 ,0 0 0 ,0 0 0
                                                      Ne t In c o m e
capital will allow Swayam
to achieve its first-year         $ 5 0 0 ,0 0 0
objectives, by being able to
hire a law firm to design a                  $0
template for enforceable
FICs (summer of 2007).
                                 -$ 5 0 0 ,0 0 0
Swayam’s initial focus on
students who are close to -$ 1 ,0 0 0 ,0 0 0
graduation will enable it to
become cash flow positive -$ 1 ,5 0 0 ,0 0 0
and profitable as early as                    2007    2008     2009    2010     2011
2011. Revenue during the
first five years will be mainly driven by repayments made by graduate students; in 2011,
about 900 out of the 1,150 students who will have started making repayments will be
graduate students. Net income in 2011 is projected to reach $261,000, which corresponds
to 18% of the revenue in that year.
Operating expenses will be of three kinds: administration, marketing & sales and
engineering. The last category mostly accounts for the salaries of the financial engineers
who will craft the details of each student contract individually.


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SWAYAM                                                                     Business Plan


Finally, a careful analysis of financial risks reveals that the factors with the largest
potential impact on profitability are:
      marketing success (i.e. the number of graduate students funded between 2007 and
       2011); and
      our ability to sign FICs with students who are close to graduation, in the early
       stages of operation.




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SWAYAM                                      Business Plan




       BUSINESS
         PLAN



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SWAYAM                                                                                                         Business Plan




                                 TABLE OF CONTENTS


EXECUTIVE SUMMARY .............................................................................................. 2
  The Need for Swayam .................................................................................................. 2
  Company Information.................................................................................................. 2
  Market Analysis............................................................................................................ 3
  Products and Services .................................................................................................. 4
  Operations .................................................................................................................... 4
  Marketing and Sales .................................................................................................... 5
  Value Created for Swayam’s Customers & Social Impact Assessment ..................... 6
  Financials ..................................................................................................................... 6
BUSINESS PLAN ............................................................................................................. 8
  Company Information: .............................................................................................. 11
     1) The Pain Point and Swayam’s Solution: .......................................................... 11
     2) Swayam’s Story: ............................................................................................... 11
  Market Analysis: ........................................................................................................ 13
     1) Target Markets: ................................................................................................ 13
     2) Customers: ........................................................................................................ 13
     3) Competition: ..................................................................................................... 14
  Products and Services: ............................................................................................... 17
     1) For International Students – The Swayam Fellowship: ................................... 17
     2) For Investors – The Swayam Angels: ............................................................... 20
  Marketing and Sales Strategy: .................................................................................. 23
     1) Near Term (2008-2009): .................................................................................. 23
     2) Long Term (2010 and Beyond):........................................................................ 25
  Operations & Risks: ................................................................................................... 27
     1) Operational Timeline: ...................................................................................... 27
     2) Intellectual Property: ....................................................................................... 28
     3) Screening Process: ........................................................................................... 28
     3) Repayments:...................................................................................................... 29
     4) Mentorship: ...................................................................................................... 29
     5) Risks: ................................................................................................................ 30
  Financials: ................................................................................................................. 33
     1) Financial Forecast: .......................................................................................... 33
     2) Financial Risks: ................................................................................................ 35
     3) Funding Required: ............................................................................................ 35
  Social Impact Assessment:......................................................................................... 37
     1) Social Value Proposition: ................................................................................. 37
     2) Tracking Social Value: ..................................................................................... 39



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SWAYAM                                                                                                       Business Plan


     3) Social Return on Investment: ............................................................................ 40
  Management & Ownership: ...................................................................................... 41
     1) Key Team Members: ......................................................................................... 41
     2) Mentors & Possible Board Members: .............................................................. 42
     3) Capitalization Structure: .................................................................................. 44
APPENDIX ..................................................................................................................... 45
  Operations & Risks: ................................................................................................... 46
     Expansion map: .................................................................................................... 46
  Financials: ................................................................................................................. 47
     1) Income Statement: ............................................................................................ 47
     2) Balance Sheet; Receipts and Disbursements: .................................................. 48
     3) Assumptions – Number of Students, Repayments: ............................................ 49
     4) Assumptions – Balance Sheet: .......................................................................... 51
     5) Assumptions – Expenses: .................................................................................. 52
     6) Sensitivity Analysis: .......................................................................................... 54
  Social Impact Assessment:......................................................................................... 55




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SWAYAM                                                                             Business Plan



Company Information:

1) The Pain Point and Swayam’s Solution:

Lack of capital is a severe impediment to pursuing higher education for many students
across the globe. Our aim is to ensure that students who have the desire and the potential
to pursue higher education have access to capital through Swayam.
Studies by international organizations such as UNESCO have highlighted the following
crucial problems:
                                     Globally, less than 25% of students of eligible age
                                      actually enroll in tertiary (or higher/post-secondary)
                                      education1. Of 151 countries surveyed by UNESCO,
                                      India and China rank #94 and #103 with 10.5% and
                                      7.5% tertiary enrollment, which is extremely low
                                      given the size of their populations. Often, lack of
                                      capital is the source of this problem.
                                     Students who do pursue higher education often
                                      hesitate to obtain loans for their expenses, out of fear
                                      of being crippled by high repayment amounts.

Swayam, which means “self-reliance” in Sanskrit, is a pioneer in peer-to-peer retail
investing. It offers ordinary people the opportunity to become Angel investors in the
education of talented individuals, in exchange for a share of those beneficiaries’ future
income: under the terms of a Future Income Contract (FIC), the students return a pre-
specified percentage of their income over a certain number of years to their Angel
investors, once they graduate and start earning. Swayam then channels these funds back
to investors as returns on their investment.


2) Swayam’s Story:

As international students at Stanford University, we fully appreciate the difficulties of
financing a graduate education. We all know someone in our home countries who gave
up on higher education due to insufficient funds.
In 2006, we stumbled across an intriguing dissertation that addressed this problem.
Andrew Carver, in his Ph. D. thesis, explored Income Collateralized Loans (percentage
of future income loans) as a new funding instrument. Swayam’s vision was born out of
Carver’s thesis. Our “unfair competitive advantage” stems from our team’s research
background and experience:

1
  Source: UNESCO, Data accessed online at: http://www.nationmaster.com/graph/edu_ter_enr-education-
tertiary-enrollment/AFR



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SWAYAM                                                                    Business Plan


      Expertise in modeling contracts that incorporate uncertainty about future
       Students are risk-averse. We use this insight to model specific contracts that
       incorporate uncertainty about future prospects, through the practice of Decision
       and Risk Analysis. One member of our team is a Ph. D. candidate in Decision &
       Risk Analysis in the Stanford Management Science & Engineering program. He
       brings with him an in-depth understanding of modeling contracts under
       uncertainty.
      Experience in sociological inquiry to formulate social marketing strategies
       One member of our team is an ethnographer with a special interest in social
       marketing. We believe having this experience gives us another unfair competitive
       advantage toward finding entry points that make us acceptable to the communities
       we are trying to serve.
      Ability to recognize and nurture high potential students
       One member of our team has done her Masters in Education, focusing on
       measurement and cultivation of high educational performance. Her expertise will
       help ensure that Swayam recognizes bright, high potential students who would
       benefit tremendously from people’s investment in their potential.


                                  Understand
                                 and deal with
                                 financial risk
                                   to create
                                    human
                                    capital
                                   contracts




                                SWAYAM
       Formulate                                               Recognize
         social                                               and nurture
       marketing                                                 high
       strategies                                              potential
                                                               students




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SWAYAM                                                                              Business Plan



Market Analysis:

1) Target Markets:

Swayam has two general target markets:
   International students with high potential and lack of capital who wish to pursue
     higher education in the United States, and
   Potential investors wanting both a financial return on their investment and the
     opportunity to make a positive social impact while making money.
Initially, within the first target market, we will concentrate on non-funded or partially
funded international graduate students pursuing higher education in technical disciplines
at U.S. universities. Eventually, we plan to extend services to students wishing to pursue
higher education anywhere in the world.


                                                                        Other
                                                                    International    1,140
 Fall 2008:          Indian & Chinese
                                                                      Graduate
                     Grads at Stanford
                                                                      Students
                                                      170




                                                              220




 Fall 2009:          Bay Area International                 Our new addressable
                     Students                               market: 16, 100 students



 Fall 2010:          Students Interested in                 Our new addressable
                     Education Anywhere in                  market: XXX students
                     the World



2) Customers:

Our first target customers are all the international graduate students in U.S. universities
who are not funded by their universities or by outside fellowships and are willing to sign
a Future-Income Contract. For now we intend to start with South Asian and Chinese
students pursuing technical degrees, as their financial needs are often more acute and
their immediate earning capacity high.
Data from the Stanford Office of Undergraduate Admissions also shows us that India and
China are the two leading countries sending students to the U.S., with India sending



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SWAYAM                                                                                      Business Plan


14.2 % and China 11.1 % of the total intake. Engineering was the second most popular
field of study, with 16.5 % of all international students opting for it as their major.
The same data gathered from the Stanford Undergraduate Admissions shows us that
California has the most number of international students, more than any other state. The
data also shows that the San Francisco-Oakland-Fremont region was the 6th highest
metropolitan area in the country in terms of attracting international students.
Our initial untapped customer base is one of the largest pools of international students in
the United States.


3) Competition:

Swayam’s competition comes from two main areas. The first are traditional sources of
funding potentially available to international students: regular bank loans,
government/army/navy funding programs in their home country, family funds, funds
from alumni of educational institutions etc. Since our contract is not binding with respect
to a student’s career choices, it is a far more attractive prospect than borrowing from the
armed forces or government of one’s home country that may channel one into specific
careers. We are also a better alternative than dipping into personal or family savings, a
costly proposition for many students from countries with lower per capita income and
higher currency-to-dollar exchange rates.
We are more attractive than traditional loan options that are difficult for international
students to take advantage of. International students have no access to federal education
loans because they are not U.S. citizens. While their American peers enjoy attractive loan
alternatives1 such as the federal Perkins loan (5% fixed interest rate for a 10 year fixed
repayment), federal Stafford loans (fixed 6.8% interest rate), etc., international students
only have access to private loans.
Sallie Mae, America’s leading provider of federal and private student loans, a company
that was recently acquired by a group of investors for $25 billion, does offer three types
of private loans for international students 2 : Signature Student Loan, MBA Loans,
LAWLOANS private loan. Not only are the interest rates offered variable and according
to the Prime Rate (instead of fixed), the standard repayment schedules can be long, for
example 15 years for the Signature Student Loan. Moreover, all three of these loans
require foreign students to have a U.S. citizen co-signer, a feat difficult to achieve for
international students who have no close contacts in the U.S. For all these reasons,
international students tend to shy away from obtaining traditional private loans in the U.S.
and view the option of paying a percentage of income as ‘safer’ than the option of
repaying a regular fixed amount loan. Our market survey of Indian graduate students

1
  For more information on the features of such federal education loan programs, please refer to:
http://www.stanford.edu/dept/finaid/loanprocessing/index.html
2
  For details on these loans options, please refer to:
http://www.salliemae.com/international/non_us_students/



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SWAYAM                                                                     Business Plan


admitted to Stanford University for fall 2007 shows that a high majority of survey
respondents expressed interest in income-based payback amounts.
Banks will not view us as competition because education loans are not profitable for them
(based on an interview with Edward Ai Huang, a sales manager and business banking
consultant at Wells Fargo in Los Altos). Instead, we plan on harnessing banks’ existing
infrastructure by partnering with them to list Swayam as one of the many investments a
bank customer can make. An investor will find Swayam fellowships attractive investment
opportunities due to the potential of high returns from the high salaries of technical
graduates from Stanford and other equivalent universities, and because of the positive
social impact they will have on students’ lives by helping fund their education.
Swayam faces its second area of competition from entrepreneurs like the for-profit Career
Concept, based in Germany (whose model is similar to ours), or the non-profit Robertson
Education Empowerment Foundation (REEF), and. Unlike Swayam, Career Concept is
not planning to reach out to the untapped market of international students in North
America and instead, plans to expand to first France and Eastern Europe (from an
interview with the CEO of Career Concept). Some of Career Concept’s most notable
successes in Germany include zero defaulters and quick growth, which are easily
replicable by Swayam.
REEF’s story is very different from Career Concept’s, and starts with that of another
company, called My Rich Uncle (MRU) (http://www.myrichuncle.com/). MRU currently
provides student loans, but also used to fund students’ education through human capital
contracts they called “education investments”. Founded by Vishal Garg and Raza Khan,
MRU was funded by Michael Robertson, a high tech entrepreneur who was eager to
invest his money in education. Robertson had once met with Milton Friedman, who
related the idea he had had in the 1940s of investing in human capital. When he heard
that MRU had a similar approach for investing in students, Robertson started a non-profit
foundation called the Robertson Education Empowerment Foundation (REEF), and
supported MRU’s work with a $3 million investment. REEF acted as an investor and
MRU as a servicing agent. REEF set up a close relationship with University of California
San Diego (UCSD), Robertson’s alma mater, eventually extending operations to other
UC schools.
In 2005, the state of California approached MRU and explained that they needed to
obtain either a lender’s license or a securities license in order to finance students’
education. When unsure of what license to apply for, their operations were put on hold.
Finally, MRU switched to regular student loans with a lender’s license, but leased their
technology to REEF who renamed the product from “education investments” to “student
securities” and continued operations within MRU’s original application. By acting as a
direct investor in students, REEF has not encountered problems with California securities
laws. REEF still works closely with MRU, though under different agreements. According
to a conversation with Tina Donaldson, Executive Director of Student Securities at REEF,
MRU is watching REEF and hoping for a proof of concept, before they can return to the
“education investment” program in the future.



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SWAYAM                                                                                      Business Plan


Our expertise in Decision Analysis, Education, and Sociology gives us an unfair
competitive advantage compared to all of those competitors. In addition, our unique
business plan provides additional value to our customers compared to the more traditional
approaches we just discussed:
      It empowers students to choose their career freely, and it eases up their fear of
       extremely negative scenarios (such as having to face debt obligations which
       would not be commensurate with their post-graduation income).
      It also empowers each investor to pick and choose the students whose future he
       would really like to invest in.


                           En t re p re n e u rs lik e Ca re e r Co n c e p t
                               (Au s t ria , It a ly, Bra zil, J a p a n )
                        No n -P ro fit s (e .g . Ro b e rt s o n Ed u c a t io n
                               Em p o we r m e n t Fo u n d a t io n )




         In ve s to r                S WAYAM BANK                                  S t ud e nt




                               Ba n k s , P riva t e Lo a n Ag e n c ie s
                  Go ve r n m e n t Fu n d in g P ro g ra m s (e .g . S in g a p o re )
                                           Fa m ily Fu n d s




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SWAYAM                                                                       Business Plan



Products and Services:

Swayam offers two services – one for international students, and one for investors.


1) For International Students – The Swayam Fellowship:

A flexible, customized, and legally-enforceable future-income contract called “Swayam
Fellowship” formalizes the agreement made by each student with Swayam and investors.
In order to be considered as potential Swayam fellows, students will first need to create a
profile, in which they will provide some background information (country of origin,
details of admission, educational qualifications and interests, amount of funding required,
and deadline by which they need the funds), and answer a few questions which will help
determine their future earning potential: for example, what is their field of study? What
are their career plans (entrepreneurial, salaried position, etc.)?
All of that data will then be used by the Swayam decision analytic engine to suggest a
few contracts that the student can choose between. These alternatives will be equivalent
in terms of overall repayments, but the duration of the repayment period will greatly vary
from one to the other. This will allow us to create contracts which satisfy the needs of
students who prefer to repay through larger fractions of their income for just a few years
after graduation, as well as the needs of those who prefer to spread smaller repayments
over an extended period of time. By selecting his preferred alternative, the student then
commits to the terms of the contract, provided that enough investors manifest themselves
before the funding deadline to take the other end of that deal.
The reason students will prefer financing their graduate education through Swayam (over
regular bank loans) is that with Swayam, they have the assurance that repayment amounts
will always be commensurate with their income, since it is a percentage of it and not a
fixed amount. The student will not be left to deal with a massive debt in addition to any
other financial pressures that may arise due to unfortunate professional or personal
circumstances.
Our initial research shows that many international students tend to be highly risk-averse
and would thus be happy to pay a small premium for that peace of mind. We are
validated in this belief through a vast body of psychology and behavioral decision-
making literature. Moreover, Career Concept, a company in Germany operating on the
same model has found that the student community there is quite risk-averse and like their
offerings.
Students will start to repay once they graduate and start earning. Let us illustrate the
practical details of a typical Swayam contract through an example (see figure below).
Karthik, a graduate student, receives $8,000 in September 2008, in exchange for 4.25%
of his income over a period of 60 months. He graduates at the end of the 2009 Winter




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SWAYAM                                                                      Business Plan


Quarter, and starts working in April 2009 for an annualized salary of $70,000. This marks
the start of the 60-month repayment period.
Every month, he owes 0.50% of his income to Swayam Bank, and 3.75% more to the
investors (Swayam Angels) who granted him the $10,000 he needed for his education.
Late payments are penalized; a penalty equivalent to15% of the late payment is owed on
the next payment date. Incomplete filings occur when the student omits to file attach a
copy of his official income statements (e.g. paystubs) to his payment; they also result in
additional fees, equal to $20 and due on the next payment date.
It is important to note that if the student leaves on a sabbatical, the repayments can be
suspended for the duration of the sabbatical with Swayam’s approval. They would then
only resume once the student returns to work. In our example, Karthik leaves on a
sabbatical in July 2013, with 9 months worth of repayments left. Swayam agrees to defer
those 9 months until he starts working again, in January 2014. September 2014 marks the
last month of repayments.
Overall, Karthik’s repayments total $1,970 to Swayam Bank and $14,480 to the
educational investment fund. For the investor, this is equivalent to buying a stock in
September of 2007 which would grow at an annual rate of 7.68%.
A few other important details of Swayam’s fellowships are detailed below:
      When crafting a human capital contract with a student, Swayam will set a cap on
       the monthly repayments owed by a student, excluding any penalties such as late
       payment fees or incomplete filing fees. The value of the cap will vary from
       student to student, but for an example such as the one discussed here, it would be
       around $1,000 per month. This ensures that students do not end up repaying
       amounts which are preposterously out of proportion compared to the amount they
       received to fund their education. It will also help fight any potential adverse
       selection effects associated with future-income contracts (see our discussion of
       risks).
      Students may ask for forbearance in case of a temporary and significant financial
       strain. The student would be responsible for providing evidence to back his claims,
       and if the evidence is considered convincing enough, Swayam and the student
       will negotiate the terms of the forbearance. In most cases, it will entail a slight
       increase in the income fraction owed by the student.
       It is in Swayam’s best interest to listen to forbearance claims and to quickly
       respond to them when necessary; failing to listen and failing to help might turn a
       committed but struggling student into a defaulter.




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SWAYAM                                                                                  Business Plan



 $300



 $250


 $200



 $150



 $100


   $50



    $0
         J a n - J u l- J a n - J u l- J a n - J u l- J a n - J u l- J a n - J u l- J a n - J u l-
          09      09     10      10     11      11     12      12     13      13     14      14



   Apr 09 – Student                                           July 13 – 6-month                  Sept 14 –
    starts working                                           sabbatical; payments             Student makes
                                                              suspended until he              last repayment
                                                                resumes work




          Repayments to Swayam

          Repayments to Swayam Angels

          Yearly Bonuses & Salary Raise

          Incomplete Filing Fees ($20, Due on Next Payment Date)

          Late Fees (15% of Late Payment, Due on Next Payment Date)




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           SWAYAM                                                                                                 Business Plan

2 ,5 0 0                                                               2 ,5 0 0
              Swa ya m Fe llo ws h ip s Is s u e d                                   To t a l Nu m b e r o f Re p a yin g Fe llo ws
2 ,0 0 0                                                               2 ,0 0 0


1 ,5 0 0                                                               1 ,5 0 0


1 ,0 0 0                                                    2 ,0 0 0   1 ,0 0 0                                                        2 ,0 5 8


  500                                                                    500
                                      200            600                                                      235          647
              30          70                                                         26          84
      0                                                                      0
           FY 2 0 0 9 FY 2 0 1 0    FY 2 0 1 1 FY 2 0 1 2 FY 2 0 1 3              FY 2 0 0 9   FY 2 0 1 0 FY 2 0 1 1 FY 2 0 1 2       FY 2 0 1 3


           As is evident from the charts showing the number of Swayam Fellowships we plan on
           issuing between 2008 and 2012, we expect the scales to tip by the fifth year. This is based
           on the experience of Career Concept, as well as on the nature of our marketing strategy.
           We think that the first few years will require tapping social networks, generating
           publicity and creating a buzz. The aim is to get universities talking about us to serve their
           constituents. Universities will use us to adopt entirely need-blind admission strategies.
           Repaying students will be allowed to serve as mentors to a new batch of students who are
           being currently funded. For instance, students coming into Stanford will have access to
           the contact information of past Stanford students who have been funded by Swayam.
           Through this process, we hope to create a large community of Swayam beneficiaries and
           benefactors. In fact, repaying students will even be encouraged to become investors in
           students themselves: one of our policies will consist in automatically creating a Swayam
           investor account for any fellow who has made repayments on time for five years, and we
           will automatically credit the account with $100. This will have two benefits: it will
           encourage timely repayments by students, and second of all, it will allow us to expand
           our investor base quickly and cheaply.
           Investors can also become mentors to incoming students if they wish to play a more
           active role in ensuring the students’ success. They will be more than welcome to provide
           career advice and connect students to employment opportunities.


           2) For Investors – The Swayam Angels:

           Traditional investment funds only provide a monetary return, which typically hovers
           around 6.7% (annual return of the S&P500 over the last 10 years). In contrast, becoming
           a Swayam Angel can lead to a superior monetary return, as well as to the satisfaction of
           having helped a bright student who needed money for school. We are convinced that
           many investors will relish the opportunity to make a difference in a young person’s life;
           comments made by some of Career Concept’s first investors corroborate that impression.
           Let us illustrate the kinds of monetary returns that Swayam Angels would receive on a
           simple example: Paul decides to help fund the education of promising Swayam Fellows,
           who are all studying in the same University and in the same department from which he


           9/30/2012                                              20 of 63         Swayam – “People investing in people”
   SWAYAM                                                                           Business Plan


   himself graduated ten years ago. First, Paul creates a Swayam Angel account on our
   website, and he transfers $10,000 from his checking or savings account to it. This
   corresponds to the maximum that he would be willing to invest in prospective Swayam
   Fellows at the moment. After careful search and careful thought, Paul has identified four
   students who match his criteria and whose education he would like to fund. One of them
   is Karthik, whose situation we just discussed in detail. Each investment costs $9,
   regardless of its magnitude; the total fees paid by Paul are thus a mere $36. The following
   table provides the details of each of the four Swayam fellowship agreements:


                     KARTHIK                 NIKKI                FELIPE                 SARAH


 DEGREE                   M.S.                 PhD                    M.S.                  M.S.
 PURSUED


  FUNDING             $10,000, incl.      $24,000, incl.           $7,000, incl.        $12,000, incl.
                     $2,000 (20% of      $4000 (16.7% of        $1,000 (14.3% of       $2000 (16.7% of
  NEEDED             total) fromPaul     total) from Paul        total) from Paul      total) from Paul


 TERMS OF              60 months             84 months             60 months              48 months
FELLOWSHIP          3.75% to Angels       5.00% to Angels       2.75% to Angels        5.75% to Angels



FIRST SALARY            $70,000             $100,000               $65,000                $60,000
& START DATE           April 2009           April 2010          September 2009          January 2010



  RATE OF
                        7.68%                 8.18%                  7.53%                 6.74%
  RETURN


   Shown below are projections of Paul’s total payments received in each year. As is
   evident from the graph, the return varies over time. During the first year (2009), two
   students are still waiting to graduate and start earning, which translates into a relatively
   low return; after that, returns rapidly ramp up, also fueled by occasional salary increases.
   Returns then peak and progressively slow down as more and more students get to the
   term of their Fellowship.
   Overall, Paul’s portfolio is equivalent to a stock which would grow at an annual pace of
   7.68% – almost 1% more than the average annual performance of the S&P 500 over the
   last ten years. In addition, Paul can feel good about his investment, since it helped four
   students obtain the funding that they needed to complete their education.




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SWAYAM                                                                                                   Business Plan



                                $ 3 ,0 0 0



                                $ 2 ,5 0 0


            Pau l's In co m e
                                $ 2 ,0 0 0



                                $ 1 ,5 0 0



                                $ 1 ,0 0 0



                                  $500



                                      $0
                                             2009   2010   2011    2012   2013   2014   2015   2016   2017


All repayments made by Karthik, Nikki, Felipe and Sarah will automatically be
transferred into Paul’s Swayam Angel account each month. That money, as well as any
money he may have left uninvested, does not remain completely idle: Paul will earn
interest at a rate which will be typical of money-market accounts (4.00% to 5.00%). This
will ensure that we provide the most value possible to our customers.
In 2010, once the number of students who would like to become Swayam Fellows
reaches a sufficiently large number, we will also start offering to investors the possibility
of investing in funds which comprise many students. These funds could be University
and domain specific (i.e. “Stanford Engineering”), or community specific, for instance,
“The African American Graduate Fund,” “The Hispanic Graduate Fund,” etc. The
creation of these funds will be based on our perception of investor needs. Where does our
investor hope to make an impact? What inequity do they hope to correct? We plan to
expand our product line accordingly.




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SWAYAM                                                                                Business Plan



Marketing and Sales Strategy:

In this section, we discuss the distribution channels we will use to reach our two
categories of customers: Swayam Angels and Swayam Fellows. The following figure
summarizes the key points of our strategy:


                    2008                  2009                  2010                      2011

                                    Advertise through ethnic student mailing lists (US)
                                               Partner up with MFIs (India)
   Swayam
   Fellows




                                                              Partner up with universities & IITs
                                                            Advertise on social networking websites
                                                                         (US & India)


                                            Target US accredited investors (US)
                   Target the socially-minded, as well as higher-income individuals who employ domestic
                            help and want to fund the education of their servants’ children (India)
   Swayam
    Angels




                                                           Use university and alumni newsletters, and
                                                                   education NGO networks
                                                           Advertise on social networking websites to
                                                           reach out to retail investors (US & India)




1) Near Term (2008-2009):

Swayam Fellows Channel – Targeted Advertising:
We will scout for potential applicants for our Future-Income Contracts in both the U.S.
and India through ethnic student mailing lists and the clientele of microfinance
institutions (MFIs), respectively.
Within the US, Swayam will concentrate on international graduate students in technical
disciplines, who will help establish proof of concept. Swayam will advertise through
ethnic student mailing lists. Most ethnic communities in U.S. universities stay connected
with through such lists. This is an easy way of reaching out to international students who
might need funding in order to stay on for another quarter or two.
At Stanford University, we plan to send advertising mails to the following lists:




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SWAYAM                                                                       Business Plan


   1. Stanford India Association (SIA): The graduate Indian community list on
      campus, SIA boasts of 866 members on its mailing list. This list gives U.S. access
      to current Stanford graduates and Stanford alumni. This could be advantageous as
      they might help U.S. get word-of-mouth publicity by suggesting U.S. to their
      friends and relatives.
   2. Sanskriti-Chaat: The undergraduate South Asian community on campus
   3. New Stanford Studs: The mailing list for admits to Stanford who are still
      contemplating accepting their admission, partly due to difficulty in sourcing funds.
Later on, we plan to reach similar mailing lists in other universities ex. UC Berkeley,
UCSF, Santa Clara University and San Jose State University.
We are starting with the Indian community as we have a good grasp of the community’s
culture with two members of our team being Indian. We also plan to contact potential
students in the Chinese community through the following list: Association of Chinese
Scholars and Students on Campus (ACSSS).
Within India (and other developing countries to follow), Swayam’s initial target markets
are the children of the adult clients of its MFI partners. Swayam will initially focus on
India for two reasons:
1) Two of the three Swayam founders are Indian with parents and strong connections in
India.
2) Swayam will seek to establish connections with the partner MFIs of Unitus (a
microfinance accelerator organization) and of the Aga Khan Foundation (an international
development organization), both of which have a strong presence in India.
Swayam will rely on local advertising through the traditional marketing channels of
partner MFIs to introduce our services to the mothers of students who are eligible for
tertiary education.

Swayam Angels Channel – U.S. Accredited Investors, the Socially-Minded in India
To get the ball rolling, we will initially target accredited American investors to fund
students in the U.S. who will be requesting larger funding amounts than what is typically
sufficient for Indian higher education. We will have these investors make their
contributions through the Swayam website.
Within India, we will target those who are socially-minded and interested in contributing
to education through our connections, such as relatives and friends. The students we will
have access to through our MFI partners on the ground will hail from the poorest strata of
society that microfinance usually works with, and will therefore favor less costly
university education, making the funding of it through small contributions easily
manageable. It is common practice for higher-income individuals who employ domestic
help in India, to fund the education of their servants’ children. We know of many such
individuals within our relatives’ friends. We believe these individuals would be
especially interested in an opportunity to invest in these students rather than treat their
funding as a scholarship.




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       SWAYAM                                                                              Business Plan


       Sales Cycle:
       Within the US, the sales cycle will closely follow the quarterly cycle at Stanford, the
       university where we will begin operations. We will identify students who are nearing
       graduation but would like to stay for an extra quarter or two if they are able to find the
       required funding. In order to provide timely funding to those students, Swayam will need
       to find their Angel investors by the end of the Fall quarter (i.e. by the end of December
       2008). The timeline below shows the US investor and student cycles:

                 Summer 08           Fall 08           Winter 09       Spring 09        Summer 09          Fall 09

US Angels                     Website operational;                                       Returns to Investors
Cycle                        accepting Angels’ funds




Fellows in the                   Find Students                Fund Students            Students Start Repaying
US Cycle




       Within India, the sales cycle will follow the traditional university academic year (June to
       March). We will work with the poorest strata of Indian society, which is the segment of
       the population targeted by MFIs because they are most in need of microfinance solutions.
       Within these strata, we are not likely to encounter any students who are already
       university graduates with a Bachelors degree. Hence, our initial focus in India will be
       undergraduate education. We will be especially keen on helping students who already
       have received some university education, but are considering dropping out due to
       financial reasons. These students will enter the job market faster, helping us establish our
       proof of concept much faster.
       The timeline for our Angels and Fellows in India will thus be very comparable to the one
       presented above for Angels and Fellows in the US. The main differences will be that:
            Overall, students will take a few months longer to graduate from their program
              and start earning than our Swayam Fellows in the US.
            The typical time window for investing in Indian students will stretch over the
              summer as well as the fall, due to the fact that the academic year in India goes
              from June to March.


       2) Long Term (2010 and Beyond):


       Swayam Fellows Channel – Partnerships with Universities
       We expect that word-of-mouth publicity will make us a destination site for students
       looking for education funding. We will continue to advertise through ethnic student
       mailing lists within the US and through a growing network of MFIs in India.



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SWAYAM                                                                       Business Plan


The main novelty compared to our initial marketing methods will be to seek partnerships
with leading universities within the US, such as Stanford or Berkeley, to help them
implement need-blind policies. If they find a student who they are unable to accept
primarily because of lack of financial aid, they will recommend Swayam to him or her as
an option. Within India, we will partner with leading Indian universities such as the
Indian Institute for Technology (IIT) in a similar manner.

Swayam Angels Channel – The EBay of Education and Social Entrepreneurship
We will use university and alumni newsletters, as well as the networks of education
NGOs (e.g. Asha, focusing on education in India) to reach out to potential Swayam
Angels. We will also advertise on web2.0 social networking websites to reach individual
retail investors who want to make a difference in the education of the future generations.
By that time, we will have started offering funds which enable prospective Swayam
Angels to invest in many students at once (see Products and Services), rather than having
to pick and choose individual Swayam Fellows. This feature will be especially interesting
for retail investors, who might enjoy the quick and easy diversification that this gives
access to. The Swayam website will also provide a social network for Angels to connect
with and trade shares in future-income contracts with their peers, as well as tools for
mentorship between students and interested investors.
Gradually, Swayam will start providing access to FICs for earlier stages of education. We
will also seek to form alliances with organizations such as the Bill & Melinda Gates
Foundation, who might be interested in using our services to fund commonly ignored
study areas such as the arts. In addition, Swayam will eventually extend its business
model so that it can provide ordinary people the opportunity to invest not just in talented
individuals, but also in schools, social ventures and socially-minded startups, or even
clean technology and environmental companies. This will make Swayam the EBay of
education and the EBay of social entrepreneurship.




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     SWAYAM                                                                                                                Business Plan



     Operations & Risks:

     1) Operational Timeline:

     The following charts provide a detailed account of our operational milestones for the next
     five years, as well our projections in terms of contracts issued and repaying students:

                           2007                          2008                  2009                       2010                       2011



FUNDING                $400,000                    Round 2, mostly
                    Round 1, mostly                  for marketing                     Returns and repayments from students
SOURCES
                     for legal fees                + Student returns


CONTRACT               Hire legal                                                                   Prepare template
                      taskforce to                                                                    contracts for
 DESIGN               design FICs                                                                    Bazaar model


                    Basic website w/               Outsource online                                 Outsource bazaar
WEBSITE              company info                   portal design                                    website design


 SOCIAL
MARKETIN                 Initiated                                                     Keep updating it
   G
DATABASE
 INCOME                 Use free                   Initiate our own
                                                                                   Update Swayam’s database, gradually phase out
                     database, e.g.               and buy access to
DATABASE                                                                                      commercial database
                      internec.net                a commercial one



  2 ,5 0 0                                                              1 ,2 0 0
              Ne w Un d e r g r a d Co n t r a c t s                                     Re p a yin g Un d e r g r a d s
                                                              500
              Ne w Gr a d Co n t r a c t s                              1 ,0 0 0         Re p a yin g Gr a d St u d e n t s           246
  2 ,0 0 0

                                                                          800
  1 ,5 0 0
                                                                          600
  1 ,0 0 0                                             220   2 ,0 0 0                                                                 892
                                                                          400                                                 63
    500
                                       50              750                200
                              15                                                                                 15           264
              6               50      250                                                            6           50
        0                                                                     0
             2007       2008         2009          2010      2011                      2007      2008          2009           2010   2011




     9/30/2012                                                   27 of 63             Swayam – “People investing in people”
         SWAYAM                                                                                                 Business Plan


         We will start with a single “Stanford Graduate Fund” in 2007 and add a “Stanford
         Undergraduate Fund” in 2008. From 2009, we will expand our horizons and cover UC
         Berkeley, UC San Francisco, Santa Clara University and San Jose State University as
         shown in the expansion map (see Appendix). The main reason these universities have
         been selected is their geographical proximity and level of academic achievement. In 2007
         and 2008, the management team will thus be able to physically meet initial applicants
         who are seeking funding.


         2) Intellectual Property:

         Like the pharmaceutical industry, we want to patent our business process. We will treat
         this as a protective patent, to prevent others from copying us, submitting a patent
         themselves, and then using their patent to claim royalty from us:

                  Em p lo ym e n t                                            S o c ia l Ma rk e t in g
                 S t a t is t ic s Da t a                                           Da t a b a s e
                        En g in e
                                                                                             We will document cultural insights about
   Just as Google’s search engine                                                        communities and identify entry points that make
database is its intellectual property,                                                   us acceptable to them. In some communities, the
  the data we mine from students’                                                          key decision maker for a student’s education
actual incomes will be valuable for
 writing more informed contracts.           SWAYAM BANK                                   could be the mother: we would then study the
                                                                                         mores that exist in the mothers’ social networks.


                                                                                                       Fu t u re -In c o m e
                                                                                                            Co n t ra c t
                      Et h ic s Te s t                                                                Ge n e ra t io n Mo d e l
                                                                                                       The FIC model is a key part of our
                                                                                                   intellectual portfolio, using which we can
  We will avoid funding student whose ethical                       Me n t o rs h ip              build customized contracts. Over time, we
  codes do not match ours: we will develop a                           P ro g ra m                plan to hone this into an automated system
 special ethics determination system with help                                                      that investors can interact with online to
              from psychologists.                                                                    create their own contracts to finance a
                                                     Swayam will offer mentorship programs to                  specific individual.
                                                   students to help them achieve their goals and
                                                 fulfill their potential. Both investors and Swayam
                                                  alumni (formerly funded students) will serve as
                                                  mentors providing advice and support to newer
                                                           generations of Swayam students.



         3) Screening Process:

         Swayam will develop a rigorous screening process to identify worthy applicants. Some
         key factors would be the field of study, the amount of funding required, the amount of
         time before the student starts working, the country of citizenship, the level of
         entrepreneurial interest and the ethical background.


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SWAYAM                                                                                      Business Plan


        Pre -S c re e n in g                               A brief pre-screening will precede a more
                                                           rigorous round of scrutiny.
        S c re e n in g :                                  The screening process will consist of:
            -    Fie ld o f S t u d y                      1. Obtaining background information –
            -    Ho w Mu c h Fu n d in g ?                    country of origin, details of admission,
            -    Ho w Ma n y Qu art e rs B e f o re           educational qualifications and interests,
                 Grad u at io n ?
            -    Co u n t ry o f Orig in
                                                              amount of funding required,
            -    En t re p re n e u rial In t e re s t     2. Assessing areas of interest – field of study,
            -    Et h ic al B a c k g ro u n d                career plans (entrepreneurial, salaried
                                                              position, etc.).
                                                           3. Ethical background – to determine
        Offe r                                                whether the student’s code of ethics aligns
                                                              with Swayam’s, and whether the student
                                                              can be trusted for future repayments.
We will record the interview to maintain a transcript of interactions with students.


3) Repayments:

After the student begins working, Swayam will manage fund transfers by asking the
student to submit pay stub details. The student will maintain their FIC with Swayam
through a website that will allow:
               Status updates of the contract (years left)
               Notification of monthly payment amounts
               Interaction with mentor(s) (see next section)
               Interaction with new students in the Swayam system, in particular with
                students from their alma mater (see next section)
Every month, Swayam will deposit a portion of the money collected from the students to
the investors of the corresponding Angel Trust.


4) Mentorship:

Students will be connected to mentors who will guide them through the Swayam process
and advise them about career decisions. Each student may have two kinds of mentors:
       Past students who have benefited from Swayam and are now paying back;
       Investors who would like to help the student be successful by passing on job
        contacts, career advice, etc.
The mentorship program will add the human touch and make students realize that a lot of
dedicated people are interested in helping them get an education and do well in life. More
than the monetary investment, this will create a personal investment and the student will



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SWAYAM                                                                       Business Plan


remember this when the time comes to make repayments. Students will automatically
turn into mentors upon graduating and thus realize that their repayments are helping
another generation of students build a brighter future for themselves.


5) Risks:

There are several risks that we have identified in this venture. They are:
   1. Investors may not trust us
   2. Students may not feel they are better off with a Future-Income Contract
   3. Students return to their home country
   4. Adverse selection effects
   5. Citing usury
   6. Beneficiary failure
   7. Gaming the system – unethical applicants

If investors do not trust us
Investors do not know if we will be able to find students whom we can invest in. They
might be put off by this. We hope to mitigate this risk by offering to return the money
with interest equivalent to a savings account if we do not reach a minimum target of
students to fund. In the first year, our target is to find at least three students.

If students do not feel they are better off with a Future-Income Contract
Students do not think they are better off with our offering. We will mitigate this through:
     Fine tuning the FIC to beat traditional funding options and giving a better deal to
       students based on their risk-aversion.
     Focusing on international students in the near and medium terms. U. S. students
       generally have access to government-subsidized loans and are culturally less risk
       averse than international students.
     Tie-ups with universities in the medium term that provide legitimacy and ease of
       access.

Return to home country
Since we plan to begin operations with international students in the United States, we
face the possibility that these students might return to their home countries after their
education. Their return could stem from a desire to return to their homes or inability to
obtain a work (H1) visa for the United States.
We will mitigate this risk by designing dual contracts, one that is applicable in the United
States and the other in the student’s home-country. For the home-country contract,
Swayam will either increase the percentage of income due or extend the repayment of
income over a greater number of years to adjust for the difference. The two contracts will
be designed to be inter-operable so as to allow movement back and forth. This idea can
be extended to multiple countries when the need arises.



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SWAYAM                                                                          Business Plan



Adverse selection effects
If we offer future income contracts to economically-challenged students, is it not likely
that we will attract students who have failed to attract better funding opportunities and
hence are less meritorious? The better students might be picked up by traditional funding
agencies. This is known as the adverse selection hypothesis.
Career Concept, a company which has been offering future-income contracts in Germany
for five years now, has found adverse selection to be an entirely theoretical idea. In
practice, the company does attract bright students, and they also find that students in the
top three business schools in Germany are more likely than other students to consider
alternative ways of funding their education such as Future-Income Contracts. This may
be attributable to the fact that good students are more likely to look for alternative
funding solutions on the internet and in the media than others.
In addition, most students, no matter what their level of academic achievement is, are
risk-averse; they are afraid of being in a situation where they need to repay amounts
which are not commensurate with their income, and they are willing to pay to avoid this.

Citing usury
A student may claim that the repayment percentage qualifies as usury and may refuse to
make repayments as per their contract. How do we then enforce our contract?
First, Swayam will charge rates that are considered reasonable, and an upper cap will
determine the most that a student would ever pay back. Second, if a beneficiary refuses to
make repayments for the educational funding he received, we have available to us all of
the alternatives that a traditional bank has in a similar situation. We could have legal
recourse for enforcement of contract; we could work with collection agencies. Third, we
will reduce the chance that such situations arise by creating a mentorship program (see
previous section), where the repaying student guides a group of new beneficiaries
through the process, thereby realizing that he is helping sustain the system. Lastly, we
would have clauses in the contract that reduce the financial burden in cases of economic
hardships, by delaying the repayment by a few months in return for adequate adjustment.

Beneficiary failure
We are trying to nurture entrepreneurs, since they can provide us with the biggest return
when they succeed and since they can also make a noticeable social return contribution.
But so many entrepreneurs fail routinely. Are we banking on too small a segment?
First, the risk for us is not all that different from the risk a regular investor faces when he
picks a portfolio of stocks. If one out of a portfolio of ten clicks, it can make up for the
nine bad ones. So, if we have budding entrepreneurs in our portfolio, we would want to
make sure that our contract allows us to share the profits from their stock holdings, which
would be far more valuable than their artificially deflated income. Second, even
entrepreneurs who failed might later recover and get a job for their individual survival.




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SWAYAM                                                                       Business Plan


Hence, we can customize the contract to get a little bit of the income if it is above a
certain level.

Gaming the system – unethical applicants
Students can lie to us about their pay stubs if we require online entry of this information.
We can require mailing in of the physical pay stubs and sending across the annual tax
return for verification.
However, verification can be a tedious administrative task. So, we will have to foster a
culture of honesty amongst students by requiring them to take a course on ethics during
their study and converting them into mentors to a new batch of students as soon as they
graduate. This will create an emotional bond, and it is much harder to cheat people you
have a personal relationship with.
In order to avoid unethical applicants, we will devise a scheme which will help identify
applicants whose code of ethics matches ours. It might seem difficult to assess something
as abstract as a person’s ethical integrity, but a few social ventures have in the past come
up with innovative ways of assessing other elements of an applicant’s profile which were
just as abstract. For example, the Aravind Eye Hospitals in India, which recruit female
paramedics, check how many family members the applicant has; they believe that the
applicant is better suited to being a care giver if they have a larger family to care for.
Similarly, we will identify concrete and measurable proxies which can help us assess a
potential beneficiary’s trustworthiness.
Some professional companies observe how an applicant behaves with the receptionist and
the administrative staff. This gives them a glimpse of the type of person they are looking
at and rude applicants are usually rejected, notwithstanding their brilliance.
We can construct appropriate criteria for our context. For instance, we could seek details
about the person’s social background and context. Some families who have seen
hardships can be more grateful for an opportunity than families which are reasonably
well to do. The microfinance initiative by the Grameen Bank shows that landless
borrowers can have a very high repayment rate.
An identical system might be difficult to construct in our context, as once the student
graduates, they are not likely to come back to Swayam for another contract. On the other
hand, a sufficient barrier might be a tie-up between Swayam and credit-rating agencies. A
default with Swayam would adversely affect the credit rating of the defaulter. This would
be a big disincentive on default in any country that recognizes credit models (e.g. the U.S.
and Europe).




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     SWAYAM                                                                                                   Business Plan



     Financials:

     1) Financial Forecast:

     Swayam’s income statement and balance sheet for the next five years can be found in the
     appendix, along with a complete list of the assumptions on which our forecast is based.
2 ,5 0 0                                                                        One of our most fundamental
                       Ne w Swa ya m Fe llo ws h ip s Is s u e d Ea c h Ye a r
                                                                                assumptions is the number of
2 ,0 0 0         To t a l Nu m b e r o f Re p a yin g St u d e n t s            students    supported     by
                                                                                Swayam’s Angel investors;
1 ,5 0 0                                                                        the next figures shows the
                                                                                number of new fellowships
1 ,0 0 0
                                                                                issued each year, as well as
   500
                                                                                the number of students who
                                                                                have already started to make
       0                                                                        repayments at that point in
      FY 2 0 0 9   FY 2 0 1 0          FY 2 0 1 1         FY 2 0 1 2 FY 2 0 1 3 time. This figure reflects
                                                                                Swayam’s intention to focus
      on students who are close to graduation during its first few years of operation: for
      example, 90% of the 2008 contracts and 80% of the 2009 contracts will be attributed to
      individuals who will be earning as early as the following year.
     This initial focus on students who are close to graduation will allow Swayam to be cash
     flow positive and profitable as early as FY 2013, in spite of the fact that very few of the
   $ 2 ,5 0 0 ,0 0 0
                                                                   students funded by the
                     Re ve n u e                                   Angels will be done with
   $ 2 ,0 0 0 ,0 0 0 Op e r a t in g Exp e n s e s                 their repayments by that
                     Ne t In c o m e                               time. Net income in FY
   $ 1 ,5 0 0 ,0 0 0                                               2013 will reach $626,000,
   $ 1 ,0 0 0 ,0 0 0
                                                                   which corresponds to 29%
                                                                   of the revenue in that year
      $ 5 0 0 ,0 0 0                                               (see figure).

                $0

     -$ 5 0 0 ,0 0 0

  -$ 1 ,0 0 0 ,0 0 0

  -$ 1 ,5 0 0 ,0 0 0
                        FY 2 0 0 9    FY 2 0 1 0   FY 2 0 1 1    FY 2 0 1 2      FY 2 0 1 3




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                    SWAYAM                                                                                                  Business Plan


                    Swayam’s operating expenses will be of three kinds (see next figure):
                          Engineering –
                           The salaries of Swayam’s financial engineers, who will craft the details of each
                           student contract based on the student’s individual characteristics, account for a
                           significant portion of engineering expenses, especially in 2011 and 2012, once the
                           number of contracts issued ramps up to several hundreds.
                           This category of operating expenses also includes research and information
                           gathering efforts which are necessary to support the work of Swayam’s financial
                           engineers: during the summer of 2008, $150,000 will be spent to hire a law firm
                           which will design a template for enforceable Future-Income Contracts; also, until
                           Q3 2009, Swayam intends to use information and resources which are available
                           for free in order to assess each student’s earning potential, but past that point the
                           bank will enter an agreement with a company providing access to a more
                           comprehensive and more accurate proprietary database.
                           Finally, it should be noted that Swayam will hire in 2008 two people in charge of
                           IT (from website design to website maintenance).
                          Marketing and Sales –
                           This category of expenses covers the salaries of those in charge of relations with
                           students and investors, as well as the costs of Swayam’s advertising campaigns.
                           Advertising will be crucial to reach out to people who might be interested in
                           becoming Swayam Fellows or Swayam Angels.
                          Administration –
                           Administration expenses include the salary of Swayam’s CEO, and that of an
                           administrative assistant (who will be hired in FY 2013). Administrative expenses
                           also account for tax and benefits related expenses, as well as office rent, utilities
                           and supplies.
$ 1 ,0 0 0 ,0 0 0                                                                     $ 2 ,0 0 0 ,0 0 0
                            En g in e e r in g                                                                   Re ve n u e fr o m Fe llo ws ' Re p a ym e n t s
  $ 8 0 0 ,0 0 0            Ma r k e t in g /Sa le s                                                             Re ve n u e fr o m Tr a n s a c t io n Fe e s
                                                                                      $ 1 ,5 0 0 ,0 0 0
                            Ad m in is t r a t io n
  $ 6 0 0 ,0 0 0
                                                                                      $ 1 ,0 0 0 ,0 0 0
  $ 4 0 0 ,0 0 0
                                                                                        $ 5 0 0 ,0 0 0
  $ 2 0 0 ,0 0 0

             $0                                                                                    $0
              FY 2 0 0 9    FY 2 0 1 0         FY 2 0 1 1   FY 2 0 1 2   FY 2 0 1 3                 FY 2 0 0 9     FY 2 0 1 0       FY 2 0 1 1        FY 2 0 1 2    FY 2 0 1


                    Swayam’s revenue during its first five years of existence will be mainly driven by
                    repayments made by graduate students (see above). Again, this is congruent with the
                    company’s initial focus on students who will start earning within a year. But it should be
                    noted that the revenue recouped from transaction fees ($9 for each investment made by a
                    Swayam Angel) is not negligible; in FY 2013, it will account for close to 30% of our total
                    revenue.



                    9/30/2012                                            34 of 63           Swayam – “People investing in people”
                 SWAYAM                                                                                                        Business Plan


                 2) Financial Risks:

                                                                                                             It is also important to
             Nu m b e r o f Fe llo ws Fu n d e d                                                             appreciate the fact that many
                                                                                                             uncertainties   could    affect
                                                                                                             profitability. We conducted a
                  Fe llo ws Re p a ym e n t Ye a r
                                                                                                             thorough analysis in order to
                                                                                                             determine which uncertainties
      Tr a n s a c t io n Fe e p e r In ve s t m e n t                                                       have the greatest potential
                                                                                                             impact, and in order to assess
                                                                                                             the magnitude of this impact.
                                   De fa u lt Ra t e
                                                                                                             The results are presented on
                                                                                                             the left, and further explained
        Ac c e s s t o Da t a b a s e o f Sa la r ie s
                                                                                                             in the Appendix. Surprisingly,
                                                                                                             the default rate has a relatively
$ 2 0 0 ,0 0 0         $ 4 0 0 ,0 0 0         $ 6 0 0 ,0 0 0         $ 8 0 0 ,0 0 0      $ 1 ,0 0 0 ,0 0 0
                                                                                                             limited impact; conversely, it
                                        FY 2 0 1 3 Ne t In c o m e                                           will be important to focus on
                                                                                                             two elements:
                           Reaching our targets in terms of number of graduate student funding issued.
                            This means that special attention should be given to our marketing strategy, in
                            order to ensure that we reach out to students and to investors as best as possible.
                           Signing contracts with graduate students who are close to graduation.
                 Finally, we would like to emphasize the fact that we benchmarked many of our
                 assumptions against data we obtained from David Schmutzler, CEO of Career Concept
                 AG. About five years after its launch, David Schmutzler’s company is profitable – this
                 lends additional strength to our forecast and to our determination.


                 3) Funding Required:

                 Swayam is looking to raise $750,000 in an initial round of funding in the first half of
                 2008. The next figure highlights some of the key operational and marketing milestones
                 that the company will be able to reach with the help of that initial round of funding.
                 In the absence of any truly comparable ventures in North America, it is difficult to speak
                 of historical trends in exit strategies for companies which revolve around the notion of
                 Future-Income Contracts. Swayam’s management will remain open to two alternatives:
                           An acquisition by a competitor such as Career Concept is possible –
                            When we contacted him, David Schmutzler, CEO of Career Concept, stated that
                            now that his company has turned profitable, it will start to explore international
                            expansion venues. At the moment, they believe that Eastern Europe and France
                            constitute ideal targets, due to the fact that the cultural context and the demand for


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SWAYAM                                                                                                            Business Plan


                          Future-Income Contracts in those countries is very similar to Germany’s situation.
                          But he also insisted that we update him frequently on the progress of our venture,
                          as he believes there is a lot of potential for success with South Asian communities.
                          Other competitors with a comparable business model could also enter the market
                          soon in Europe or in South America and if successful there, they might be
                          interested in acquiring a company like Swayam.
                          Finally, more traditional financial institutions might also be interested in an
                          acquisition; in such an eventuality, however, Swayam’s management would ask
                          for guarantees that the unique business model of its company will be understood
                          and respected, because it is this business model which will be at the core of
                          Swayam’s success.
                         An IPO –
                          In such an event, Swayam’s management will strive to ensure that the
                          management and the board retain a controlling stake in the firm. The simple
                          reason for this is, once again, a desire to preserve a business model and an
                          organizational culture which are conducive to success.

                                      Su m m e r               Fall                Sp rin g          Su m m e r      Fall
                                                                            …
                                       2008                   2008                  2009              2009          2009

                                                  $ 7 5 0 ,0 0 0
                                       In it ial Ro u n d o f Fu n d ing
            OPERATIONAL
 MILESTONES MILESTONES




                                   Le g al re s e arc h
                                   o n e n fo rc e ab le
                                   fu t u re -in c o m e
                                       c o n t rac t s
                                      ($ 1 5 0 ,0 0 0 )



                                                                                         Firs t
   MARKET




                                                               Fir s t                                              Se co nd
                                                             Fe llo ws                 Fe llo ws
                                                                                                                     ye ar o f
                                                           fu n d e d b y             g rad u at e
                                                                                                                    s tude nt
                                                            S wa ya m                  & s t art
                                                                                                                    fu n d in g
                                                                                      re p ayin g




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SWAYAM                                                                                   Business Plan



Social Impact Assessment:

1) Social Value Proposition:

Swayam’s theory of social change is based on the premise that once promising young
individuals are given the means to fund their education, their quality of life and in many
cases the quality of life of their entire family will greatly improve; in addition, their
professional success after graduation will provide a reliable and lasting source of income
to the investors who funded their education through Swayam’s platform.
Swayam will have a powerful social impact on students through the following means:
       Swayam will offer a viable and attractive alternative for promising students to
        fund their education by using their future income instead of traditional assets as
        collateral.
       For those students otherwise unable to afford higher education, benefits include
        higher lifetime income, increased personal and professional mobility, and more
        hobbies and leisure activities1.
       Swayam will offer peace of mind to funded students through Future-Income
        Contracts, the terms of which ensure that repayment amounts will be
        commensurate with those students’ financial means.
       Swayam will constantly strive for visibility to ensure that no high potential student
        renounces higher education for lack of funds. As explained earlier, we will enter
        agreements with select U.S. universities such as Stanford University and U.C.
        Berkeley to have these institutions publicize Swayam’s services to students in
        need of funding. We will also reach out to students in need through
        announcements sent to foreign students mailing lists.
       Swayam will offer mentorship programs to its students to help them achieve their
        academic and career goals and fulfill their potential. Both investors and Swayam
        alumni (formerly funded students) will serve as mentors providing advice and
        support to newer generations of Swayam students. Investors, in particular, will by
        the very nature of our contracts have an incentive to ensure the academic and
        career success of Swayam Fellows, in order to maximize their own return on
        investment.
       Alumni of the Swayam Fellowship program will be encouraged to keep giving
        back to Swayam by becoming investors themselves, so that they can reach out
        and do for the newer generation of students what the previous generation of
        investors did for them.


1
 Institute for Higher Education Policy (1998). Reaping the Benefits: Defining the Public and Private Value
of Going to College. The New Millennium Project on Higher Education Costs, Pricing, and Productivity.



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SWAYAM                                                                            Business Plan


       Swayam will build communities amidst its student members – some based on
        university, some based on country of origin. This will establish a sense of
        community support and facilitate smooth running of mentorship networks.
       Finally, the positive changes in students’ lives will ripple to affect their entire
        families. In some communities, lifting one family member out of poverty through
        access to higher education is enough to create lasting change for the entire family.
        Studies have shown that highly educated women tend to spend more time with
        their children, and use this time to better prepare the child for the future 1. Finally,
        Swayam believes that entrepreneurial initiatives trigger lasting positive changes in
        society as well as high returns for investors. Swayam will therefore strive to
        encourage entrepreneurial ventures proposed by its students.
Swayam will have a meaningful social impact on investors through the following means:
       Swayam will provide excellent financial returns to the Angels who invest in its
        Fellows. Most of these investment opportunities will yield returns equivalent to
        those of a stock growing at an annual rate of 7.5%, making them more attractive
        than the S&P 500 for example.
       Swayam will also offer funds, through which a Swayam investor can invest in
        multiple students at once and thereby mitigate risk through diversification. By
        placing some of their capital into such a fund, investors will be funding the
        education of a whole cohort of students. As more students obtain funding through
        Swayam, the potential adverse impact of the poor performance of one individual
        will be diluted.
       Becoming a Swayam Angel investor will be a particularly sensible investment
        for individuals close to retirement. This is because the highest returns will occur
        about several months, sometimes several years after the initial investment, once a
        significant portion of the students funded through Swayam have started earning
        (see Products and Services). An individual who becomes an active Swayam Angel
        about 5 years before retiring will be able to benefit from high returns at the time
        when he needs them the most.
       Many investors will obtain gratification from the certainty that their investment
        is meaningfully impacting the lives of young and talented individuals. Swayam
        will keep Angel investors informed of the progress made by the students whose
        education they are funding, and will encourage those investors to become mentors
        for students who share their career interests.




1
 Cohn, E., & Geske, T.G. (1992). Private Nonmonetary Returns to Investment in Higher Education. In
Becker, W. & Lewis, D. The Economics of American Higher Education. Boston, MA: Kluwer Academic
Publishers.



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SWAYAM                                                                       Business Plan


The figure below illustrates the impact value chain which governs our process:

                                                                               Go a l
                                                                            Alig n m e n t
                                                       Ou t c o m e s
                                                                                  Lac k o f
                                    Ou t p u t s             Hig h e r       c ap it al n o t a
                                                        s t an d ard o f       re as o n f o r
                  Ac t ivit y          Hig h e r          livin g f o r          lac k o f
                                      lif e t im e      students &                h ig h e r
 In p u t                                                   f am ilie s
                   Fu n d in g       e arn in g s                              e d u c at io n
                        of                 fo r
  Fu n d s                           students            S o m e s t art     S u s t ain ab le
                  students’
                                                          ve n t u re s         c h ain o f
                  e d u c at io n
                                     R e t u rn t o                             p o s it ive
                                     in ve s t o rs     In c re as e in       c h an g e f o r
                                                        in ve s t o rs ’       students,
                                                           w e alt h          f am ilie s &
                                                                            c o m m u n it ie s




2) Tracking Social Value:

Swayam will constantly track the social value it creates through three metrics which will
be indicative of its success:
        Number of students funded through Swayam graduating –
         The social outcome that this will allow us to estimate is the increased access to
         graduate and undergraduate education provided by Swayam’s Angel Investors.
        Average earnings of funded students over time –
         This metric will serve as a proxy for another key social outcome – the standard of
         living of students whose education was funded through Swayam.
        Rate of return to investors –
         The rate of return to investors will help assess the contribution made by Swayam
         to the financial wellbeing of those who make its success possible.
These three social impact metrics are interdependent. A good rate of return to investors
will convince more people to become Swayam Angel investors. Ultimately, more
students will be funded; generating increased positive community effects among these
students. Consequently, over time, average earnings per individual might benefit from
this linked chain of events. Finally, higher earnings of Swayam fund recipients will ramp
up the rate of return to investors and this cycle of positive change will start over.
Swayam’s investors and students will be updated quarterly on the values of these social
impact metrics, to help reinforce the notion that they are part of a venture that provides
both a sound financial deal and the opportunity to effect lasting and measurable social
change.



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SWAYAM                                                                                                                            Business Plan


3) Social Return on Investment:

In this section we will attempt to monetize Swayam’s total social return on investment.
Armed with knowledge from studies1, 2, 3, 4 on the economic benefits of an undergraduate
or graduate education, including one conducted by the U.S. Census Bureau, we quantified
the social returns to students in terms of an increase in lifetime income. The detail of our
assumptions and calculations is shown in the Appendix; for a student who is able to
obtain a graduate degree thanks to Swayam, the increase in lifetime income was assessed
to be $600,000.
We then assessed the social return to Swayam’s Angel investors. One of the main
benefits to them is access to a fund with average annual returns of 7.5%, compared to an
average of about 6.7% for a portfolio of traditional stocks such as the S&P 500 over the
last 10 years.
This simple analysis demonstrates the extent of the social impact created by Swayam
over the next five years; the social benefit / cost ratio is over 31. The details of these
calculations are in the Appendix; the figure below shows the results in graphic form.
                               $ 1 4 0 ,0 0 0 ,0 0 0         S t u d e n t s Wh o Co m p le t e d a Hig h e r           $ 6 0 0 ,0 0 0
                                                             Ed u ca t io n Th a n k s t o S wa ya m
                               $ 1 2 0 ,0 0 0 ,0 0 0
    So c ial Be n e fit fo r




                                                                                                                                         So c ial Be n e fit fo r
                                                             Re t u r n t o In ve s t o r s (co m p a r e d t o         $ 5 0 0 ,0 0 0
                                                             S &P 5 0 0 )
                               $ 1 0 0 ,0 0 0 ,0 0 0




                                                                                                                                               In ve s to rs
                                                                                                                        $ 4 0 0 ,0 0 0
          Stu d e n ts




                                $ 8 0 ,0 0 0 ,0 0 0
                                                                                                                        $ 3 0 0 ,0 0 0
                                $ 6 0 ,0 0 0 ,0 0 0
                                                                                                                        $ 2 0 0 ,0 0 0
                                $ 4 0 ,0 0 0 ,0 0 0

                                $ 2 0 ,0 0 0 ,0 0 0                                                                     $ 1 0 0 ,0 0 0

                                                $0                                                                      $0
                                                FY 2 0 0 9    FY 2 0 1 0         FY 2 0 1 1          FY 2 0 1 2   FY 2 0 1 3

It should be noted that this analysis does not take into account some of the social benefits
we mentioned in the Social Value Proposition section which are, by nature, harder to
quantify – such as peace of mind for students who know that the amounts they will repay
will be commensurate with their future financial means, or the indirect effects of these
individuals’ access to higher education on their families and communities.




1
  http://www.census.gov/prod/2002pubs/p23-210.pdf
2
  http://www.ericdigests.org/2003-3/value.htm
3
  http://www.theathonline.ca/view.php?aid=496
4
  www.aacsb.edu/resource_centers/Value/AustralianEconomicValue-BusinessEducation.pdf



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SWAYAM                                                                       Business Plan



Management & Ownership:


1) Key Team Members:

                   Deepti Chatti earned a Masters degree in the Environmental
                   Engineering and Science program at Stanford University and a B.E. in
                   Civil Engineering from Osmania University, Hyderabad, India. She has
                   extensive project experience in green design, environmental
                   sustainability and microfinance (specifically, the provision of
                   microfinance to the urban poor of Hyderabad for accessing water and
                   sanitation). She has been a Teaching Assistant for various courses and
                   is currently organizing Brainstorming India, a course to encourage
entrepreneurial thought for solving social problems in India. She has previously worked
with ASHA, an education NGO, to determine optimal use of resources while funding
schools in India. She will start work at an environmental consulting firm in June 2007.

                  Ashni Mohnot earned an M.A. in International Educational
                  Administration and Policy Analysis from the Stanford University School
                  of Education (September 06) and a B.A. in Human Biology
                  (International Health focus) and English at Stanford University (June 05).
                  She currently works as Assistant Director of Liberation Curriculum, the
                  Education Program of the Martin Luther King, Jr. Research & Education
Institute at Stanford. She has extensive experience in curriculum development through
her current position, her former internship at Stanford Program in International and
Cross-cultural Education (SPICE) and her work with United World College, India. As an
Associate at the Stanford Office of Undergraduate Admission for a year, she counseled
prospective freshmen both at Stanford and in Mumbai and is familiar with higher
education admission and financial aid processes at Stanford and its peer institutions. She
has conducted extensive research in the fields of international education and health.

                  Thomas Seyller is a Ph.D. candidate in Management Science and
                  Engineering (MS&E) at Stanford University with an area of
                  concentration in Decision and Risk Analysis. He also earned a Masters
                  degree in MS&E at Stanford and an engineering degree at Ecole
                  Polytechnique in France. His professional experience includes being a
                  consultant at Strategic Decisions Group (SDG), Palo Alto, at le Crédit
                  Immobilier de France (a company offering real estate loans) and at a
Silicon Valley startup. He has academic and research experience in the fields of Decision
Analysis, Artifical Intelligence, Probability, Economics, Finance and Optimization and
has been a Teaching Assistant for Decision Analysis class at Stanford.




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SWAYAM                                                                     Business Plan


2) Mentors & Possible Board Members:

Swayam will select a board of advisors who are accomplished in the fields of education,
risk modeling, banking, law and sociology. We have already identified a few illustrious
individuals and are in the process of requesting their membership on our board:
   1) Jessica Flannery is the co-founder and spirit behind Kiva.org, a successful young
      nonprofit that partners with American lenders and microfinance institutions to
      facilitate peer-to-peer lending. Kiva.org has channeled $6 million in loans to
      entrepreneurs, provided by over 60,000 retail investors. Jessica also worked in
      rural Kenya, Tanzania and Uganda with Village Enterprise Fund and Project
      Baobab. Given the parallels between Kiva’s model and our idea, we met with
      Jessica and are exploring a formal involvement with Swayam.
   2) Chris Larsen is the CEO and co-founder of Prosper.com, America’s first peer-to-
      peer lending marketplace that allows people to request loans or bid on them using
      an online auction platform, much like eBay. Prosper now has 270,000 registered
      members and has handled $60 million in loan transactions. Prior to founding
      Prosper, Chris was co-founder, chairman and CEO of E-LOAN. Under his
      guidance, E-LOAN closed $27 billion in consumer loans and was the first
      company to provide consumers access to credit scores. We are interested in
      learning about the legal framework within which Prosper operates.
   3) Ronald A. Howard has been a Professor in the Stanford School of Engineering
      and a pioneer in the Decision Analysis field since 1965. He directs teaching and
      research in the Decision Analysis track of the Stanford Management Science &
      Engineering Program. He was a founder and chairman of Strategic Decisions
      Group, a consulting company. Professor Howard’s background in business and
      deep familiarity with financial decision analysis will be invaluable for Swayam.
   4) Dr. Martin Carnoy is a labor economist specializing in the relation between the
      economy and educational systems. Dr. Carnoy has been a Professor of Education
      and Economics at Stanford University School of Education since 1969. An active
      member of the Board of Directors of the Comparative and International
      Educational Society (CIES) since 1998, Dr. Carnoy is currently writing a book for
      the International Institute of Educational Planning on Globalization and
      Educational Reform. Dr. Carnoy’s background will be useful as we seek to target
      an international market of students and investors.
   5) Jack Russo is a partner in Russo & Hale LLP, a Palo Alto law firm specializing
      in intellectual property issues. Mr. Russo is admitted to practice in California,
      New York, Washington, D.C., and Hawaii as well as the U.S. Supreme Court and
      a number of federal courts. His knowledge in the field of intellectual property
      rights, his interest in advising startups and his professional connections will be
      especially useful as we design Future-Income Contracts.
   6) Andrew B. Carver received a Ph.D. degree from Stanford in Management
      Science and Engineering. Swayam’s model is based on his dissertation, entitled


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SWAYAM                                                                     Business Plan


      Income Collateralized Loans: Market and Policy Explorations. His business
      background includes experience at AXA Rosenberg Investment Management and
      Eli Lilly Pharmaceuticals, and a position as Vice President at Bank of America.
   7) Stan Christensen teaches courses in Negotiation and Sustainable Development at
      Stanford. He is currently a Managing Director at Arbor Advisors, a boutique
      investment bank focusing on the technology sector. Before co-founding Arbor, he
      worked in over 75 countries as a mediator and negotiation advisor and a member
      of The Council on Foreign Relations. His familiarity with the banking sector is of
      special interest to Swayam.
   8) Chip Heath is a Professor of Organizational Behavior in the Stanford Graduate
      School of Business. Chip has taught courses on Organizational Behavior,
      Negotiation, Strategy, International Strategy, and Social Entrepreneurship. Prior
      to joining Stanford, Professor Heath taught at the University of Chicago Graduate
      School of Business and the Fuqua School of Business at Duke University. Chip
      has given us advice on our business strategy.
   9) Vishal Garg is Co-Founder and CEO of MyRichUncle.com (MRU), a company
      that provides students loans for education by treating students as credit-worthy
      borrowers and even financing student borrowers without a credit history or
      lacking a credit-worthy co-borrower, by taking into account criteria (such as the
      GPA, the school, or the program of study) that indicate a student of promise.
      MRU used to invest in students’ education through future-income loans. They
      shelved this program because of legal complications.
   10) Roy Chapman is holder of US Patent # 5809484: “Method and Apparatus for
       Funding Education by Acquiring Shares of Students’ Future Earnings” that
       patents the financial instrument of future income loans/income-collateralized
       loans. A former entrepreneur, Chapman is interested in seeing this financial
       instrument widely used in society. Swayam plans to approach Chapman as a
       possible investor, advisor and board member.
   11) Tabreez Verjee is on the Board of Directors for Kiva.org, Managing Director of
       Global Asset Capital and President of GoFish Corporation. His experience with
       Kiva and venture capital are of particular interest to Swayam.
   12) Aziz Valliani is the Chairperson of the Aga Khan Foundation that focuses on the
       development areas of health, education, rural development and strengthening civil
       society through intellectual and financial partnerships with organizations
       providing innovative solutions to the problems of development. Mr. Valliani has
       expressed preliminary interest in linking Swayam with its network of
       microfinance institutions in developing countries and in helping Swayam secure
       angel funding.
   13) Dave Richards is on the Board of Directors for Unitus, an organization that helps
       accelerate the growth of the world’s highest potential emerging microfinance
       institutions in order to provide every individual with access to microfinance.



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SWAYAM                                                                       Business Plan


       Swayam’s products and business model match Unitus’ emerging interest in
       microfinance related products and services.
   14) Michael Robertson is the founder of MP3.com, a company that created the
       largest collection of digital music, long before iTunes. He is currently CEO of
       SipPhone, a company that provides phone services over the Internet. Most
       relevant to Swayam, he is founder of REEF, a non-profit organization that invests
       in students for higher education in the UC system, on the basis of future income.
       Robertson is also an advisor to MyRichUncle.


3) Capitalization Structure:

Swayam is a personalized education fund that customizes educational funding packages
according to the needs of the students being served. Swayam will be structured as an
online bazaar that will enable investors to select students to fund by choosing from
profiles demonstrating need. Swayam’s online portal will also allow students to apply for
[product name] in a simple, easy and intuitive process akin to applying for regular student
loans.
The growth of Swayam requires the personal vision of the three founders whose
backgrounds and experiences are well matched to the different dimensions of the
business. For this reason, we will ensure, if possible, that the majority stake in the
business (at least 51% of the voting rights) is shared equally amongst the four founders,
though we might seek venture capital funding to start Swayam. Retaining a controlling
stake in the company even in the event of an IPO will enable the founders to be invested
in its growth and active in its direction.




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SWAYAM                                          Business Plan




            APPENDIX




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Operations & Risks:

Expansion map:




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SWAYAM                                                                       Business Plan



Financials:

1) Income Statement:

                               Swayam Bank
                              Income Statement ($)

                              FY 2009      FY 2010         FY 2011      FY 2012       FY 2013

Revenue
  Swayam Fellows             $15,488       $60,658        $200,399     $514,991    $1,531,431
  Trading Fees                $3,528       $12,060         $32,400     $125,100      $625,500
Total Revenue                $19,016       $72,718        $232,799     $640,091    $2,156,931

Cost of Goods Sold                 $0           $0              $0           $0           $0

Gross Margin                 $19,016       $72,718        $232,799     $640,091    $2,156,931
  % of Revenue                  100%          100%            100%         100%          100%

Operating Expenses
  Engineering               $552,300      $405,227        $515,574      $630,279     $858,669
  % of Revenue                 2904%          557%            221%           98%          40%
  Marketing/Sales             $3,500      $124,633        $266,755      $324,542     $331,808
  % of Revenue                   18%          171%            115%           51%          15%
  Administration             $12,530      $154,628        $186,123      $198,422     $331,470
  % of Revenue                   66%          213%             80%           31%          15%
Total Operating Expenses    $568,330      $684,488        $968,452    $1,153,243   $1,521,947
  % of Revenue                 2989%          941%            416%          180%          71%

Income Before Int & Taxes   ($549,314)   ($611,769)      ($735,652)   ($513,152)    $634,984
   % of Revenue                -2889%        -841%           -316%         -80%          29%

  Interest Expense               $78          $300            $960       $2,640       $8,897
  Interest Revenue            $3,598        $7,934          $4,649         $135           $0

Income Before Taxes         ($545,795)   ($604,135)      ($731,963)   ($515,658)    $626,087
   Tax Exp                         $0           $0              $0           $0           $0

Net Income                  ($545,795)   ($604,135)      ($731,963)   ($515,658)    $626,087
  % of Revenue                 -2870%        -831%           -314%         -81%          29%




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   SWAYAM                                                                                                         Business Plan


   2) Balance Sheet; Receipts and Disbursements:

                                                              Swayam Bank
                                                               Balance Sheet ($)

                                                             FY 2009          FY 2010        FY 2011        FY 2012        FY 2013
   ASSETS
   Current Assets
     Cash                                                $211,092         ($383,472)      ($1,100,246)   ($1,604,584)    ($968,205)
     Net Accounts Rec                                      $1,150            $3,394            $9,603        $26,404       $88,973
     Inventory (0 days)                                        $0                $0                $0             $0            $0
   Total Current Assets                                  $212,242         ($380,078)      ($1,090,643)   ($1,578,180)    ($879,232)

   Gross Fixed Assets                                        $10,500          $19,000        $25,000        $28,500        $38,000
     Less Accum Depreciation                                  $3,500           $9,833        $18,167        $24,167        $30,500
   Net Fixed Assets                                           $7,000           $9,167         $6,833         $4,333         $7,500

   TOTAL ASSETS                                          $219,242         ($370,911)      ($1,083,810)   ($1,573,847)    ($871,732)

   LIABILITIES
   Short Term Liabilities
      Accounts Payable (30 days)                              $4,513           $6,125        $11,667        $16,133        $19,083
      Salaries Payable (15 days)                              $9,375          $19,500        $26,815        $31,168        $41,676
      Taxes Payable (90 days)                                     $0               $0             $0             $0             $0
      Line of Credit (100% of net A/R)                        $1,150           $3,394         $9,603        $26,404        $88,973
      Current Portion of Capital Equipment Lease                  $0               $0             $0             $0             $0
      Current Portion of Long Term Debt                           $0               $0             $0             $0             $0
   Total Short Term Liabilities                              $15,037          $29,019        $48,084        $73,705       $149,733

   Long Term Liabilities
     Capital Equipment Lease (3 years)                           $0                $0             $0             $0             $0
     Long Term Debt (5 years)                                    $0                $0             $0             $0             $0
   Total Long Term Liabilities                                   $0                $0             $0             $0             $0

   TOTAL LIABILITIES                                         $15,037          $29,019        $48,084        $73,705       $149,733

   Equity
     Preferred Stock                                           $0                $0                $0             $0             $0
     Common Stock                                              $0                $0                $0             $0             $0
     Retained Earnings                                   $204,205         ($399,931)      ($1,131,894)   ($1,647,552)   ($1,021,465)
   Total Equity                                          $204,205         ($399,931)      ($1,131,894)   ($1,647,552)   ($1,021,465)

   LIABILITIES & EQUITY                                  $219,242         ($370,911)      ($1,083,810)   ($1,573,847)    ($871,732)


$ 2 ,2 5 0 ,0 0 0
$ 2 ,0 0 0 ,0 0 0         Re c e ip t s                                                         Year by Year Evolution of
                          Dis b u r s e m e n t s
$ 1 ,7 5 0 ,0 0 0                                                                               Swayam’s    Receipts   &
$ 1 ,5 0 0 ,0 0 0
                                                                                                Disbursements.
$ 1 ,2 5 0 ,0 0 0
$ 1 ,0 0 0 ,0 0 0
   $ 7 5 0 ,0 0 0
   $ 5 0 0 ,0 0 0
   $ 2 5 0 ,0 0 0
              $0
               FY 2 0 0 9   FY 2 0 1 0          FY 2 0 1 1       FY 2 0 1 2     FY 2 0 1 3




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                 SWAYAM                                                                                                                                                                                   Business Plan


                 3) Assumptions – Number of Students, Repayments:

                                                                                                FY 2009                         FY 2010                        FY 2011                         FY 2012                        FY 2013
                  New Swayam Fellowships Issued                                                     30                              70                            200                             600                          2,000
                  Total Number of Repaying Fellows                                                  26                              84                            235                             647                          2,058


                                                        SWAYAM FELLOWSHIPS

Swayam Fellows                                                                                                                                                                           FY 2009                  FY 2010            FY 2011              FY 2012             F
                                                                                                                                           See Detail ->                                      30                      70
Number of Fellowships Issued............................................................................................................................................................................................                200                  600
                                                                                                                                           See Detail ->                                   $8,000                 $12,000
Average Fellowship Size............................................................................................................................................................................................                  $15,000              $20,000              $
                                                                                                                                           See Detail ->                                $240,000                 $840,000
Total Amount of Fellowships Issued............................................................................................................................................................................................      $3,000,000         $12,000,000           $50
                                                                                                                                           See Detail ->                                       4                       5                 6
Average Duration of Repayment Period (in years) ............................................................................................................................................................................................                   7
                                                                                                                                           See Detail ->                                   1.50%                    1.25%
Fraction of Income due to Swayam............................................................................................................................................................................................          1.00%                 1.00%              1
                                                                                                                                           See Detail ->                                     90%                     80%               70%
Fraction of Students who Graduate and Start Earning within a Year............................................................................................................................................................................................60%
                                                                                                                                                                                           Year 1                   Year 2            Year 3               Year 4              Y
                                                                                                                                           See Detail ->                                  $70,000                 $77,000
Salary of Students over Repayment Period............................................................................................................................................................................................ $85,000              $95,000             $1
                                                                                                                                                2.00%
Default Rate............................................................................................................................................................................................

Trading Fees                                                                                                                                                                            FY 2009           FY 2010               FY 2011               FY 2012             F
                                                                                                                                         See Detail ->                                      80               200                    500
Number of Swayam Angels Investing in Each Year............................................................................................................................................................................................               2,000             1
                                                                                                                                         See Detail ->                                     50%               40%                   30%
Fraction of Swayam Angels Investing in Excess of $10,000............................................................................................................................................................................................      25%
                                                                                                                                         See Detail ->                                     40%               35%                   35%
Fraction of Swayam Angels Investing Between $1,000 and $10,000............................................................................................................................................................................................35%
                                                                                                                                         See Detail ->                                     10%              25%                    35%
Fraction of Swayam Angels Investing Less Than $1,000............................................................................................................................................................................................         40%
                                                                                                                                         See Detail ->                                       6                 9                     10                    10
Average Number of Investments by Swayam Angels Investing in Excess of $10,000............................................................................................................................................................................................
                                                                                                                                         See Detail ->                                       4                 6                      7                     7
Average Number of Investments by Swayam Angels Investing Between $1,000 and $10,000....................................................................................................................................................................................
                                                                                                                                         See Detail ->                                       3                 4                      5                     5
Average Number of Investments by Swayam Angels Investing Less Than $1,000............................................................................................................................................................................................
                                                                                                                                         See Detail ->                                     392              1,340
Total Number of Trades in Each Year............................................................................................................................................................................................   3,600                13,900             6
                                                                                                                                               $9.00
Fee per Trade............................................................................................................................................................................................

Late Fees and Other Fees
                                                                                                                           15%
Late Fees Penalty as a Percentage of Last Amount Due............................................................................................................................................................................................
                                                                                                                          0.50%
Fraction of Students Facing Late Fees (per Month) ............................................................................................................................................................................................
                                                                                                                            $20
Incomplete Filing Fees (e.g. Forgot to Include a Copy of their Pay Statement) ............................................................................................................................................................................................
                                                                                                                          1.00%
Fraction of Students Facing Incomplete Filing Fees (per Month) ............................................................................................................................................................................................

Expenses
                                                                                                                                           $150,000
Total Legal Fees............................................................................................................................................................................................
                                                                                                                                           $100,000
Website Design............................................................................................................................................................................................
                                                                                                                                             $1,000
Website Hosting (per month) ............................................................................................................................................................................................
                                                                                                                                               $500
Access to Database of Salaries per Field of Study (per month) ............................................................................................................................................................................................




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SWAYAM                                                                                    Business Plan


 $ 1 2 0 ,0 0 0
                                                                                 Year by Year Evolution
 $ 1 0 0 ,0 0 0                                                                  of the Average Salary
  $ 8 0 ,0 0 0                                                                   of a Swayam Student.
  $ 6 0 ,0 0 0

  $ 4 0 ,0 0 0

  $ 2 0 ,0 0 0                    Ave r a g e Swa ya m Fe llo w Sa la r y

           $0
            Ye a r 1   Ye a r 2      Ye a r 3         Ye a r 4        Ye a r 5



Notes and Sources:
    Based on data obtained from David Schmutzler, CEO of Career Concept AG:
       Career Concept issued 5 contracts during its first year of existence, 20 during its
       second year of existence, and 1,500 during its fifth year of existence.
    Based on the same source, 400 students had started making repayments during
       Career Concept’s fifth year of existence.




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       SWAYAM                                                                                                                                                                            Business Plan


       4) Assumptions – Balance Sheet:


                                                                                          BALANCE SHEET


                                                                                    (in days)..........................................................................................................................................................................
                                                                                                                                                                                             15 days
Accounts Receivable (adjustable up to 360 days)..........................................................................................................................................................................................................
                                                                                    (in days)..........................................................................................................................................................................
                                                                                                                                                                                             30 days
Accounts Payable (fixed at 30 days).....................................................................................................................................................................................................................
                                                                                    (in days)..........................................................................................................................................................................
                                                                                                                                                                                             15 days
Salaries Payable (fixed at 15 days)............................................................................................................................................................................................................................
                                                                                    (in days)..........................................................................................................................................................................
                                                                                                                                                                                             90 days
Taxes Payable (fixed at 90 days).............................................................................................................................................................................................................................
                                                                                    (in days)..........................................................................................................................................................................
                                                                                                                                                                                              0 days
Inventory (adjustable up to 360 days)..........................................................................................................................................................................................................................
                                                                                    (as a percentage of net accounts receivable)..................................................................................................................
                                                                                                                                                                                              100%
Available Credit Line.........................................................................................................................................................................................................................................
                                                                                    (amount borrowed not to exceed)....................................................................................................................................
                                                                                                                                                                                          $2,000,000
Maximum Credit Line Used.....................................................................................................................................................................................................................................
                                                                                    (in years).........................................................................................................................................................................
                                                                                                                                                                                             3 years
Capital Equipment Lease Term (1 year minimum).........................................................................................................................................................................................................
                                                                                    (in years).........................................................................................................................................................................
                                                                                                                                                                                             5 years
Long Term Borrowings Term (1 year minimum).............................................................................................................................................................................................................


DEPRECIATION                                                      Hardware                       Software                Furn & Fixtures
Financial Engineering                                              3 years                        3 years                    3 years
Sales & Marketing                                                  3 years                        3 years                    3 years
Administration                                                     3 years                        3 years                    3 years




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        SWAYAM                                                                                                                                                                              Business Plan


        5) Assumptions – Expenses:

                                                                                                 EXPENSES


 HEADCOUNT                                                                   FY 2009                       FY 2010                       FY 2011                        FY 2012                       FY 2013
 Financial Engineering                                                            3                             4                             5                              6                             8
 Sales & Marketing                                                                 -                            1                             2                              2                             2
 Administration                                                                    -                            1                             1                              1                             2
 TOTAL                                                                            3                             6                             8                              9                            12


 PER PERSON EXPENSES                                                Supplies                  Travel & Meals                Phone/Postage
 Financial Engineering                                                             150                            -                    150
 Sales & Marketing                                                                 150                          500                    200
 Administration                                                                    150                        2,000                    200


 EQUIPMENT PURCHASES                                               Hardware                       Software                 Furn & Fixtures
 Financial Engineering                                                   2,500                                   500                   500
 Sales & Marketing                                                       2,000                                     -                   500
 Administration                                                          2,000                                     -                   500


                                                                                         (as a percentage of salaries)...........................................................................................................................................
                                                                                                                                                                                                     20%
 Benefits & Taxes.......................................................................................................................................................................................
                                                                                         (as an annual percentage)...............................................................................................................................................
                                                                                                                                                                                                      4%
 Salary Increases..................................................................................................................................................................................................
                                                                                         (as a percentage of sales)...............................................................................................................................................
                                                                                                                                                                                                      0%
 Sales Commissions.....................................................................................................................................................................................................
                                                                                         (as a percentage of total revenue)...................................................................................................................................
 Total Sales Through Commissions................................................................................................................................................... 0%
                                                                                         (as a percentage of total revenue)...................................................................................................................................
                                                                                                                                                                                                      1%
 Business Insurance..................................................................................................................................................................................................
                                                                                         (as a percentage of collections).......................................................................................................................................
                                                                                                                                                                                                      1%
 Anticipated Bad Debt...................................................................................................................................................................................................
                                                                                         (as a percentage of cash balance)..................................................................................................................................
                                                                                                                                                                                                    1.5%
 Interest Revenue...........................................................................................................................................................................................................................
                                                                                         (as a percentage of outstanding balance).......................................................................................................................
                                                                                                                                                                                                     10%
 Interest Expense On Credit Line....................................................................................................................................................................................................
                                                                                         (as a percentage of outstanding balance).......................................................................................................................
                                                                                                                                                                                                     10%
 Interest Expense On Capital Equipment Lease....................................................................................................................................................................................................
                                                                                         (as a percentage of outstanding balance).......................................................................................................................
                                                                                                                                                                                                     10%
 Interest Expense On Long Term Borrowings....................................................................................................................................................................................................
                                                                                         (as a percentage of positive cumulative income).............................................................................................................
                                                                                                                                                                                                     40%
 Combined Federal & State Tax Rate.................................................................................................................................................................................
                                                                                         (per square foot)..............................................................................................................................................................
                                                                                                                                                                                                    $2.00
 Office Rent................................................................................................................................................................................................................
                                                                                         (square footage per person)............................................................................................................................................
                                                                                                                                                                                                  150 sq ft
 Minimum Office Space......................................................................................................................................................................................................................
                                                                                         (in months)......................................................................................................................................................................
                                                                                                                                                                                                   12 mos
 Term of Office Lease......................................................................................................................................................................................................................
                                                                                         (per square foot)..............................................................................................................................................................
                                                                                                                                                                                                    $0.15
 Utilities Expense...........................................................................................................................................................................................................
                                                                                         (per square foot)..............................................................................................................................................................
                                                                                                                                                                                                    $0.10
 Maintanence Expense................................................................................................................................................................................................


 Expenses
                                                                                                                                                                                              $150,000
 Total Legal Fees............................................................................................................................................................................................
                                                                                                                                                                                              $100,000
 Website Design............................................................................................................................................................................................
                                                                                                                                                                                                $1,000
 Website Hosting (per month) ............................................................................................................................................................................................
                                                                                                                                                                                                 $500
 Access to Database of Salaries per Field of Study (per month) ....................................................................................................................................................................................



$ 1 2 0 ,0 0 0
                                                                                                                                                     Year by Year Evolution of
                                     Ad ve r t is in g
                                                                                                                                                     Swayam’s Advertising Costs.
$ 1 0 0 ,0 0 0

  $ 8 0 ,0 0 0

  $ 6 0 ,0 0 0

  $ 4 0 ,0 0 0

  $ 2 0 ,0 0 0

              $0
               FY 2 0 0 9                  FY 2 0 1 0                 FY 2 0 1 1                FY 2 0 1 2                 FY 2 0 1 3




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SWAYAM                                                                     Business Plan


Notes and Sources:
    “Legal fees” refer to the amount which will be spent on designing the best
       contract between Swayam and students from an enforceability standpoint. This
       research would be conducted during the summer of 2008.
           o Source for the estimate: Russo & Hale LLP, Palo Alto.
    The database of salaries will be used to get a better understanding of a student’s
       potential earnings over his lifetime, depending on his field of study. We plan on
       using free databases until Q3 2009, such as the ones provided by
       http://www.interec.net/.
    The advertising costs for 2008 are based on the typical prices that the Stanford
       Daily would charge for advertising packages that would be of interest to us.
           o Source for the estimates: Stanford Daily:
                    Package A: 1/4 page ads, total 9 ads (33 col inches each); rate:
                      $10.00; total: $2,970.
                    Package B: two 1/4 page ads + five 1/8 page ads, total 7 ads; rate:
                      $10.50; total: $1,480.




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        SWAYAM                                                                        Business Plan


        6) Sensitivity Analysis:

               In order to obtain the tornado diagram presented in the Financials section of this
        business plan, we focused on one measure of Swayam’s profitability, namely its net
        income in FY 2013.
               We then varied different parameters, one by one, while keeping all other
        parameters constant and equal to the values presented in sections 3), 4) and 5). The
        following table shows the extreme values used for each parameter:

                                             Low Value            Current Value            High Value
Cost of Access to Database of Salaries          $100                  $500                  $3000 p/m
Default Rate                                  2x Lower               2.00%                  2x Higher
Transaction Fee per Investment                  $6.00                 $9.00                   $12.00
Fellows Repayment Year                   20% Take 1 Year Less      See Details         20% Take 1 Yr Longer
Number of Fellows Funded                     20% Lower             See Details             20% Higher


               The tornado diagram shown in the Financials section captures the results we
        obtained. For example, a number of Fellows funded by Swayam which would be 20%
        higher than the number shown in 3) would help increase net income in FY 2013 from
        approximately $626,000 to approximately $925,000.
               It should be noted that, in case of a higher or lower student enrollment than
        forecast, Swayam would adapt to such circumstances by reducing or increasing its
        headcount. In practice, this would slightly tone down the impact of this uncertainty on net
        income, but not enough for it to lose its rank as the most important factor to consider.




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                       SWAYAM                                                                                                                                                                Business Plan



                       Social Impact Assessment:


                                                                                                           Swayam Bank
                                                                                                  Social Return on Investment ($)

                                                                                                                                         FY 2009               FY 2010                FY 2011                FY 2012             FY 2013

Number of Fellows Completing Studies                                                                                                                  26                    58                   151                    412            1411
   Number of Those Who Would not have Been Able to Without Swayam                                                                                      0                     3                    15                     62             212

Social Benefits
    Students Who Completed a Higher Education Thanks to Swayam                                                                                     $0          $1,740,000             $9,060,000           $37,080,000         $126,990,000
    Return to Investors (compared to S&P 500)                                                                                                  $1,920              $8,640                $32,640              $128,640             $528,640
Total Social Benefits                                                                                                                          $1,920          $1,748,640             $9,092,640           $37,208,640         $127,518,640

Expenses
    Engineering                                                                                                                            $552,300               $405,227              $515,574              $630,279             $858,669
    Marketing/Sales                                                                                                                          $3,500               $124,633              $266,755              $324,542             $331,808
    Administration                                                                                                                          $12,530               $154,628              $186,123              $198,422             $331,470
Total Expenses                                                                                                                             $568,330               $684,488              $968,452            $1,153,243           $1,521,947

Social Purpose Benefit Flow                                                                                                               ($566,410)           $1,064,152             $8,124,188           $36,055,397         $125,996,693

Discount Rate                                                                                                                                      12%

NPV of Social Benefits                                                                                                                $116,336,579
NPV of Expenses                                                                                                                         $3,739,604
Benefit / Cost Ratio                                                                                                                         31.11




                                                                                                                ASSUMPTIONS


Student Related Social Benefits                                                                                                          FY 2009              FY 2010              FY 2011                 FY 2012               FY 2013
Fraction of Fellows Funded in that Year Who Would
                                                                                                                   0%                     5%                    10%                       15%                        15%
      Not Have Received a Higher Education Without Swayam...........................................................................................................................................................................................
                                                                                                                                   $600,000
Social Benefit to those Students............................................................................................................................................................................................


Investor Related Social Benefits
                                                                                                                                 6.70%
Average Annual Return - S&P 500............................................................................................................................................................................................
                                                                                                                      7.50%
Average Annual Return - Investing in a Swayam Fellow............................................................................................................................................................................................
                                                                                                   $8,000               $12,000                 $15,000                   $20,000                    $25,000
Average Amount given by Swayam Angels to a Student to Fund Higher Education............................................................................................................................................................




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SWAYAM                                                                             Business Plan


DEEPTI CHATTI
14C-Apt 105, Comstock Circle,                                              cdeepti@stanford.edu
Escondido Village                                                        deepti.chatti@gmail.com
Stanford University,                                                               650-862-1814
CA- 94305

EDUCATION:
Stanford University, Stanford, CA (09/2005 – 04/2007)
Master of Science, Environmental Engineering and Science
Osmania University, Hyderabad, India (10/2001- 04/2005)
Bachelor of Engineering, Civil Engineering

PROJECTS:

      Currently working with Prof. Leonard Ortolano, preparing a consultant’s report to the
       World Bank on the status of the environment in Bihar, India, for the Bank’s goal of
       mainstreaming.
      Currently working on a Water Credit study for Hyderabad, India. The study is funded by
       WaterPartners International (http://water.org), and looks at using microfinance to improve
       water and sanitation access for the urban poor.
      Green design of a school in Ocotal, Nicaragua. Coordinated a team of 20 Stanford
       students for the design, and acted as point of contact between the Stanford team, the
       engineer in Ocotal in charge of construction, the funding organization, and the school
       administration. Spent time on site to interact with the school children and staff, to assess
       their wants for the school building, and to develop a working relationship with the onsite
       engineer; Fall 2006.
      Ecological Sanitation in rural Haiti, and in the Stanford Community Farm. Design of
       EcoSan facilities for both locations; Spring 2006.
      Studying the Sardar Sarovar Project, India – the environmental activist movement and its
       significance; Spring 2006.
      Study of the Searsville Dam site (Stanford property) - relation between ground water
       levels and surface water flow; Fall 2005 – present.
      Removal of heavy metal ions from industrial effluent. Fabricated eco-friendly, low-cost
       adsorption set up from scratch using fly-ash columns, and studied its effectiveness in
       removal of Chromium, reduction in COD, pH, turbidity, conductivity, and color; Fall 2004
       – Summer 2005.
      Activated Sludge Process – study of design and implementation, NEERI (National
       Environmental Engineering and Research Institute, Hyderabad, India); Fall 2004 – Winter
       2004.
      Stability analysis of a gravity dam, NHPC (National Hydroelectric Power Corporation),
       New Delhi, India; Summer 2004.

EXPERIENCE:

Environmental Engineer Intern (June – September, 2006)
    Carollo Engineers, Walnut Creek, CA (a water and wastewater engineering firm).
       Involved with several projects –
            Construction of Ellis Creek Water Recycling facility in the City of Petaluma, CA.
            Proposal and preliminary design for a recycled water pipeline for the Marina
               Coast Water District in the City of Marina, CA.
            Worked on hydraulic data for wastewater treatment plant in Roseville, CA.
            Assimilation, compilation, and presentation of data from pilot studies




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SWAYAM                                                                            Business Plan


               Updating environmental impact reports, and incorporating the EIR into the
                specification for the Contractor.
             Creating in- house sustainability checklists for engineers and project managers to
                use in different stages of any project.
Recent Work Experience
    Teaching Assistant for ‘Environmental Planning Methods’, Spring 2007, Stanford.
    Teaching Assistant for ‘Water and Sanitation in Developing Countries’, Winter 2007,
       Stanford.
    Teaching assistant for ‘Design for a Sustainable World’, Fall 2006, Stanford. The course
       is run by the Stanford chapter of Engineers for a Sustainable World (ESW)
    Course assistant for Prof. Mark Jacobson in Spring 2006 for ‘Atmospheric Pollution’,
       Stanford.
    Teaching assistant for Prof. Ron Howard in Spring 2006 for ‘The Ethical Analyst’,
       Stanford.
    Course assistant for Prof. Mark Jacobson in Fall 2005 for ‘Weather and Storms’, Stanford.
    Student assistant in Robert Crown Law library, and the Art Library in Fall 2005, Stanford.
    Student worker at the Graduate Community Center housing office, Escondido Village,
       Stanford until Summer 2006.

Organization/ Planning/ Budgeting
    Member of Asha for Education, Stanford chapter. Organize an annual fundraiser every
       March, and raise money for the activities all year. Meet fortnightly to discuss and vote on
       education projects to fund in India.
    Community Associate for Escondido Village; responsibilities include being the point of
       contact between the housing office and residents, organizing events every two weeks for
       the neighborhood, planning, budgeting, and execution.
    Several large scale college festivals (both technical and cultural), handled sponsorship,
       infrastructure, publicity, press, guest speakers, student delegates, student volunteers.
    Organised an evening of jazz and theatre for two consecutive years, for ‘Society to Save
       the Rocks’, an NGO working towards preserving the natural topography of the Deccan
       plateau, India.
    As part of a theatre company, acted in, and helped produce the play ‘Schrodinger and
       Pandora’. Held two successful shows that sold out, and made profits for all involved
       parties. Was involved in planning, production, publicity, and sales – May – July 2004.
    Stage manager for ‘Action’, a graduate student one-act in Feb, 2006, Stanford University.

Teaching/Communication
      Organized and helped teach Brainstorming India, a course to encourage entrepreneurial
        thought for solving social problems in India in Spring 2007, Stanford University.
      Taught English (speech, reading, and writing) to Mathematics, Science, and History
        teachers who taught children freed from bonded labor (in their native tongue- Telugu).
        Teaching sponsored by MV Foundation; the endeavor was to make them conversant to
        speak with visiting international delegates.
      Provided the voice-over for educational and training software made by WIPRO, India.
      HIV/AIDS Surveillance study- the Medical Monitoring Project, sponsored by the
        California Department of Health Services, speak with often reluctant hospital staff and
        administration about the treatment provided to patients.
Writing
     Started and ran the college newsletter ‘Imprint’, in the capacity of editor and writer.
     Contributed regularly to the college website.

LANGUAGE SKILLS: Fluent in English, Hindi, Telugu; conversant in Tamil.




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SWAYAM                                                                                        Business Plan



ASHNI MOHNOT

       1329 Park Drive #9, Mountain View, CA 94040; 650-804-4068; ashni.mohnot@gmail.com


SUMMARY OF QUALIFICATIONS AND OBJECTIVE
Program developer; project manager; curriculum writer; researcher; policy analyst; excellent writing and
editing skills; exceptional interpersonal, leadership, public speaking skills; proficient in English, Hindi,
Gujarati. Seeking a position in international education, health, development or social entrepreneurship.

CURRENT POSITION
Assistant Director, Liberation Curriculum (LC), MARTIN LUTHER KING JR. RESEARCH &
EDUCATION INSTITUTE, Stanford University, Stanford, CA (10/06 – present)
Write curriculum on the American civil rights movement and global social justice struggles; write
and manage multiple grants (including one from the National Endowment for the Humanities);
fundraise; seek and strengthen domestic and international educational partnerships (ex. with the
Museum of the African Diaspora (MoAD), Alameda County of Education, photographer Michael
Collopy); facilitate teacher development workshops; conduct marketing and outreach efforts,
design and develop programs (ex. King Digital History Project, Global Liberation Initiative),
manage consultants and interns, redesign and maintain LC website, and do directed historical
research, writing and editing.

SOCIAL ENTREPRENEURSHIP
Team Member & Co-Founder, Swayam, Stanford, CA (2/07 – present)
Designing a business plan, networking with venture capitalists and investors and bringing to
fruition Swayam, a peer to peer investing company that applies the concept of microfinance to
education by allowing investors to lend to students without capital for higher education, in return
for a fraction of future income. Swayam won 3rd place (out of 66 teams) in the prestigious
Business Association of Stanford Engineering Students (BASES) Social Entrepreneurship
Challenge.

EDUCATION
STANFORD UNIVERSITY, Stanford, CA (2001-05)
MA Education, International Educational Administration and Policy Analysis program
  Conferred 8/06; Cum. GPA 3.9/4.0
BA Human Biology with a concentration in International Health and BA, English with an
  emphasis on Creative Writing. Conferred 6/05; Cum. GPA: 3.6/4.0.
  Graduated with Honors in Feminist Studies (creative writing thesis – started writing a novel).
STANFORD IN OXFORD, London, England (1/04 – 4/04)
  Overseas Study Program. Coursework included: ‘Shakespeare: The Late Plays’, ‘Britain and
  World War II’ (with a final conference in Berlin) and a tutorial on ‘19 th century British literature,
  emphasis on Dickens’.
SOPHOMORE COLLEGE, Stanford University, Stanford, CA (9/02)
  Selected from a competitive pool of students to participate in a rigorous 3 week class on
  globalization.

AWARDS & HONORS
   Cap and Gown, Stanford University’s Women’s Honor Society (10/04)
   Undergraduate Research Opportunities (URO) Major Grant (8/04)




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SWAYAM                                                                                   Business Plan


   Awarded Gold Medal for 1st rank in school and 2nd in all India (96.5%) in the ICSE
    examination (1999).

WORK EXPERIENCE
Research Intern, CURRICULUM DEVELOPMENT, Stanford University, Stanford, CA (4/06 –
8/06)
  Interned at SPICE (Stanford Program in International and Cross-cultural Education), a
  curriculum development non-profit (part of Freeman-Spogli Institute for International Studies,
  Stanford). Collaboratively drafted a ‘Silk Road’ Social Studies (Grades 6-10) curriculum for the
  Chicago public school system (presented at an all-Chicago teachers’ conference on 8-7-06).
  Integrated existing ‘Silk Road’ curricula; inserted my fresh ideas; presented ideas to and
  brainstormed with colleagues; generated new learning objectives and activities; conceptualized a
  barter simulation; primary writer for Trade Lesson.
Admissions Associate, OFFICE OF UNDERGRADUATE ADMISSION, Stanford University,
Stanford, CA (9/05-9/06)
  Give hour long ‘Discover Stanford’ presentations to prospective freshmen and other visitors in
  California and Mumbai, India; provide in-depth admissions counseling for students and families
  on the admissions process in person and on phone; gained intensive public speaking and public
  relations experience; excellent interpersonal skills.
Tour Guide, VISITOR INFORMATION SERVICES, Stanford University, Stanford, CA (9/05 –
9/06)
  Conduct tours of the Stanford campus and Hoover Tower Observation Platform for groups of
  visitors; answer questions about visiting Stanford via phone and in person; complete
  administrative responsibilities ex. scheduling tours, selling fact books; learn and retain
  knowledge of Stanford history and facts; intensive public speaking, public relations;,
  interpersonal skills
Program Assistant, GREAT BOOKS SUMMER READING PROGRAM, Stanford, CA (6/24/05-
7/2/05)
  Teaching Assistant and Resident Assistant for week-long summer reading program for 11-14
  year olds; co-facilitated discussions (Shared Inquiry Method) on several literary, philosophical
  and visual works; led a creative writing elective leading to a final performance; constantly
  supervised, planned and led activities for the girls; conducted academic discussions within my
  assigned pod of girls.
Editor & Columnist, COMMUNICASIANS; Associate Opinions Editor & Columnist,
STANFORD BIOTECHNOLOGY QUARTERLY (SBQ), Stanford, CA (9/03 – 3/05; 1/03 – 6/04)

 Finalized content, assigned stories, edited drafts, worked personally with writers and wrote
 columns on Indian transnationals, British Indians, the Berlin Holocaust museum and international
 student financial aid for Communicasians, a quarterly Asian-focus magazine. For SBQ, I
 researched and wrote opinion articles on stem cell research, egg donors, euthanasia and GMOs
 and edited other writers’ drafts.
Editorial Intern, VERVE MAGAZINE, Mumbai, India (7/02 – 8/02)
 Verve is a women’s magazine profiling influential Indian women. Wrote articles; conducted and
 transcribed interviews; edited several pieces; compiled databases on content addressed and
 people featured in previous issues; attended press conferences and cultural events; assisted
 marketing department in generating a strategy for introducing classified ads.

RESEARCH EXPERIENCE
Masters Monograph/Thesis, INTERNATIONAL EDUCATIONAL ADMINISTRATION AND
POLICY ANALYSIS, Stanford University, Stanford, CA (9/05 – 8/06)
  Wrote a monograph examining whether the English Literature papers of the Indian Certificate of
  Secondary Education (ICSE) high stakes examination have tested for higher order cognition over
  a thirty year range, given the Indian Govt.’s policy push towards higher order cognition



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SWAYAM                                                                                     Business Plan


Research Assistant, INTERNATIONAL HEALTH & EDUCATION, Stanford University,
Stanford, CA (6/04 – 7/04)
  Researched and wrote sections of two chapters on ‘Childhood and Education’ and ‘Reproductive
  Health’ to assist Anne Firth-Murray, Professor in Health Research and Policy and Founding
  President, Global Fund for Women, SF in writing From Outrage to Courage: Women Taking
  Action for Health and Justice (published 2007).
Research Assistant, PUBLIC HEALTH SCHOOL, UC Berkeley, Berkeley, CA (6/04 – 8/04)
  Worked for Dr. Julia Walsh of the Bay Area International Group (B.I.G.) of the Berkeley School
  of Public Health on a project examining AIDS in sub-Saharan Africa as a function of measures of
  female vulnerability, ex. female literacy, female ability to refuse sex, female control of
  contraception etc. Funding provided by URO Major Grant.

LEADERSHIP & EXTRACURRICULAR EXPERIENCE
Curriculum Developer, for MAHINDRA UNITED WORLD COLLEGE, INDIA, Stanford, CA
(1/06 – 3/06)
  Developed a curriculum unit on conflict in South Asia for a 7th subject on ‘Nationalism and
  Internationalism’ to be instituted at Mahindra United World College India (one of nine global 10-
  12th grade UWC International Baccalaureate schools).
Social Manager, HAMMARSKJOLD HOUSE, Stanford, CA (9/05 – 6/06)
  Planned and implemented social activities (ex. weekly wine and cheeses, annual alumni
  Thanksgiving dinner, quarterly Special Dinners) for 47 members of a residential co-operative
  house and restaurant; was an active member of house staff team; prepared house for arrival and
  departure of residents.
Head Peer Academic Co-ordinator, ALONDRA DORM, Stanford, CA (9/04 – 6/05)
  Residential Academic Advisor for 60 person all-freshman dorm; organized talks on academic
  subjects ex. study abroad, freshman seminars, choosing majors; organized non-academic events;
  counseled freshman on 4-year plans, using Stanford’s academic opportunities, and personal and
  social issues; served as liaison with academic resources on campus, especially Undergraduate
  Advising Programs (UAP).
Associate Editor, CREATIVE WRITING DEPARTMENT, Stanford, CA (1/05 – 6/05)
  Served as associate student editor for a political fiction anthology called ‘Stumbling and Raging’
  published fall 2006 by MacAdam Cage Publishing, SF; read submissions from writers all over
  the world; worked with writer and editor Stephen Elliott (former Wallace Stegner Fellow and
  Jones Lecturer, Stanford) and other student editors to determine final stories.
Teacher, Student Initiated Courses, Stanford University, Stanford, CA (1/05-3/05)
  Co-taught a 2 unit class on ‘Indian Literature in English: Major Authors’ offered through
  Stanford English Department; faculty sponsor – writer Adam Johnson. Designed
  syllabus/curriculum, conducted class discussions, networked with writers and invited Bharati
  Mukerjee, famous Indian writer, to read and lecture to the class.

ADDITIONAL INFORMATION
   Proficient in use of MS Office, Dreamweaver and both Windows and Mac environments;
    familiar with Endnote, research databases, Photoshop, Web 2.0 applications ex. blogging and
    other social media infrastructure; possess excellent Internet research skills
   Research Assistant to Professor Ron Barrett, Anthropological Sciences, Stanford University
    (6/05 – 8/05) and to Dr. Miriam Goodman, Molecular & Cellular Physiology, Stanford
    University (6/03 – 8/03)
   Served as volunteer to Stanford’s International Financial Aid Committee; Veterans’ Hospital in
    Menlo Park, CA; Planet Read (Same Language Subtitling Bollywood & TV Serials Literacy
    Campaign); Women and Youth Supporting Each Other (WYSE), East Palo Alto, CA, as
    Facilitator for Stanford Anthology for Youth (SAY) and as Peer Academic Advisor for
    Undergraduate Advising Program, Stanford.




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SWAYAM                                                                                  Business Plan


   Had poetry published in Fusion (first issue, 2002), a nation-wide literary magazine published
    by University of Indiana-Bloomington and in two campus literary magazines: Word Choice
    (Fall 2005) and Reorient (Fall 2005).
   Social Chair (02-03) and President Intern (01-02) International Undergraduate Community,
    Stanford.
   Joint Secretary, Saheli, Stanford’s South Asian Women’s Alliance (2001-02), Member (01–
    04).
   Member of MENSA.




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    SWAYAM                                                                       Business Plan




                                   THOMAS SEYLLER
3960 Bell Road, Apt. 1119                                            Phone:
                                          tseyller@stanford.edu
Hermitage, TN 37076                                                  650-387-7826

EDUCATION
9/04 – 3/08     Stanford University, CA – PhD in Management Science & Engineering
                Area of concentration: Decision and Risk Analysis. GPA: 4.1
                Teaching Assistant for Decision Analysis I, II & III (MS&E 252, 352, 353)
9/02 – 3/04     Stanford University, CA – MS in Management Science & Engineering
                Area of concentration: Decision and Risk Analysis. GPA: 4.0
                Teaching Assistant for Decision Analysis I, II & III (MS&E 252, 352, 353)
9/99 – 9/02     Ecole Polytechnique, Paris, France – Engineering Degree
                Areas of concentration: Applied Mathematics and Economics

WORK EXPERIENCE
Co-founder, Swayam (Education Loans Company), Stanford, CA
Our aim is to ensure that students who have the desire and the potential to pursue higher education have
access to capital. Swayam will lend money to such individuals; in exchange, they will return a pre-specified
percentage of their income once they graduate and start earning. Swayam is currently raising capital.
6/04 – 9/04      Intern, Strategic Decisions Group, Palo Alto, CA
                 Worked on four engagements, all with pharmaceutical companies. We identified the best
                 strategy for clinical trials for an oncology molecule, and assessed the values of various
                 drugs in the Alzheimer’s disease, Parkinson’s disease and proton pump inhibitors markets.
7/03 – 8/03     Strategic Consulting Project, Credit Immobilier de France (Real Estate Loan
                Company), Strasbourg, France
                Devised a company-wide workflow management strategy which simplified and accelerated
                loan-offering procedures, while reducing costs by 30%. The model took many uncertainties
                into account, such as the number of customers or the cost and duration of various tasks.
4/03 – 6/03     Strategic Consulting Project, Multidigit, Menlo Park, CA
                Built a comprehensive model to help a high-tech start-up company decide how to market a
                new technology. The recommendations also brought clarity to the management on the value
                of the technology and of the start-up.
4/02 – 7/02     Intern, AXA France Assurance (Insurance Company), Paris, France
                Designed a process to analyze any given hedge fund, in order to recognize its merits and
                drawbacks for insurance purposes. Presented my recommendations to upper management,
                and created an Excel tool which would carry out the analysis automatically. The tool also
                helped identify hedge funds which were likely to use excessive leverage effects.



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    SWAYAM                                                                      Business Plan



SKILLS AND AWARDS
Languages:      Fluent in English, French (native language) and German. Beginner level in Russian.
Software:       Used to working in a Windows environment, familiar with Unix. Java, MS Office,
                VisualBasic.
Awards:         Best Teaching Assistant award from the department of Management Science & Engineering
                at Stanford University (June 2006).
                3rd place in the Social Entrepreneurship Challenge at Stanford University (June 2007).




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