Selling shares in people isn't a new idea. Upstart started by doing this exact same thing in 2012 (they pivoted to personal lending and were very successful). But Upstart couldn't make the investing in people marketplace work.

There's too much information asymmetry. The highest-potential people (i.e., the ones you'd want to invest in!) know they're rockstars. And they value their future earnings potential as such. But it's very difficult to evaluate someone's potential as an ordinary investor. Just look at the hit rate on hiring people into jobs (not ideal) – and hiring likely has more diligence than here.

The highest-potential people therefore feel the deal the investors would give them is bad (and don't take it). The mediocre people will take the deal. But investors won't get a good return, and the company will need to make the deal less and less advantageous to the mediocre people until the mediocre people even find it unappealing.

There are many examples of failures in people-related investment products. The information asymmetry leaves someone holding the bag – typically the investor. 3 examples:

1. Income share agreements (ISA) for education. Many companies and even states (e.g., Oregon) have tried this to poor effect. People majoring in STEM degrees didn't take the deal (as it was a bad deal for them given their future earnings power). And people majoring in humanities did take the deal (as it was a good deal for them given their lower future earnings power). Also, many people who actually may benefit from ISAs don't really understand them and also won't take them. Note: Bloom Tech seems to be making ISA's work through force of will. But they also are in a specific niche where the ROI is much clearer and the ISAs are therefore easier to underwrite.

2. Life insurance for people with illnesses. There's a market for paying ill people money now in exchange for being the beneficiary on their life insurance. It provides the ill people a better living now and provides a return later for the investors. But, the information asymmetry and potential fraud with medicals can lead to a bad outcome for investors. For example, if I agree to pay someone $50k per year until they die in exchange for being the beneficiary on a $500k life insurance policy, then I'm in the red if they live for more than 10 years. The medicals may indicate the person may have 3 to 5 years to live. But what if they live 20? So while this market exists, it's very niche and very risky due to the information asymmetry.

3. Buying shares in an athlete. Fantex pioneered this starting with NFL players. Players took the deal because they are injury-prone and many have short careers. There was information asymmetry at work again. And nearly all investments in athletes went poorly (shorter careers, less than expected earnings).

So overall, I think we'd all love to see a model work where we can bet on individual people to succeed and share in their success. However, it just doesn't work. It's not the same as investors betting on the founders of companies – those founders have to have the money for success. The individuals probably don't need substantial capital (and even if they were using the money to create something – wouldn't you rather have the piece of the company than a piece of their earnings?).