Make School was a Y Combinator-backed education startup that attempted to replace traditional computer science education with an innovative Income Share Agreement (ISA) model. Founded in 2012 as MakeGamesWithUs by MIT and UCLA dropouts Jeremy Rossmann and Ashutosh Desai, the company raised $30 million and achieved regulatory milestones before collapsing in 2021[1][2].
Make School's failure stemmed from three critical issues: operating illegally as a for-profit college from 2016-2018, implementing ISA practices that could saddle students with over $250,000 in debt, and achieving catastrophically low completion rates—only 3 of 202 enrolled students finished the two-year program as of 2019[3][4]. Despite being positioned as a college alternative that would democratize tech education, Make School ultimately exemplified how regulatory compliance and genuine product-market fit cannot be bypassed through innovative financing structures.
Make School emerged from the educational pedigree and entrepreneurial ambitions of two young founders. Jeremy Rossmann dropped out of MIT in Fall 2011, while Ashutosh Desai left UCLA, both having previously graduated from Menlo School[5]. Their decision to abandon traditional higher education to build an alternative reflects the classic Silicon Valley narrative of disrupting the system from within.
The founders launched MakeGamesWithUs and joined Y Combinator's Winter 2012 batch in January 2012[6]. Initially, the company offered computer science summer camps for high school and college students—a more conventional approach to coding education that provided immediate revenue while the founders developed their broader vision[7].
The early focus on game development and coding camps positioned the company in the growing "learn to code" movement, capitalizing on increasing demand for programming skills and the perception that traditional computer science education was too theoretical and slow-moving for industry needs.
Make School evolved from a coding camp provider into a comprehensive college alternative built around Income Share Agreements. The core product was a two-year computer science program that promised to prepare students for software engineering careers without requiring upfront tuition payments.
The ISA model represented the company's key innovation: students would pay nothing during their studies, then contribute a percentage of their post-graduation income for a specified period. This approach aimed to align the school's incentives with student outcomes while removing financial barriers to entry.
In 2015, Make School launched what it claimed was the first ISA-backed long-form computer science program[18]. The curriculum focused on practical software development skills, mobile app creation, and web development—areas where traditional computer science programs were perceived as lacking.
The program achieved a significant regulatory milestone in 2018 when it became the first post-secondary program to receive accreditation under the Western Senior Colleges and Universities Commission (WSCUC) incubation policy, overseen by Dominican University of California[19]. This accreditation was crucial for legitimizing the program and enabling students to access federal financial aid.
Make School positioned itself in the rapidly growing alternative education market, targeting students dissatisfied with traditional computer science programs' theoretical focus and high costs. The company competed against coding bootcamps like General Assembly and Lambda School, while differentiating through its longer program duration and ISA financing model.
The target market consisted primarily of career changers and recent high school graduates seeking practical programming skills without the time and expense of a four-year degree. Make School's "gap year" positioning appealed to students who wanted to enter the workforce quickly while still obtaining credentials that employers would recognize.
The company's key differentiators included:
However, Make School faced intense competition from both traditional universities adapting their curricula and numerous coding bootcamps offering faster, more focused training.
Make School's business model centered on Income Share Agreements, where students paid no upfront tuition but committed to paying a percentage of their post-graduation income. The company partnered with Vemo Education to structure and service these ISAs.
The ISA terms varied, but the student lawsuit revealed that packages could total more than $250,000 when used to finance the full two-year program plus living expenses[20]. This represented a significant financial commitment that could exceed the cost of many traditional college programs.
Revenue came from:
The model's appeal lay in its apparent alignment of incentives—Make School only succeeded financially if students found well-paying jobs. However, the structure also created pressure to inflate job placement statistics and starting salaries to attract both students and investors.
Make School's traction metrics revealed concerning patterns that foreshadowed its eventual collapse. As of 2019, approximately 202 students had enrolled since the program's 2014 launch, but only three students had completed the full two-year program[21]. This represents a completion rate of less than 1.5%—an extraordinarily poor outcome for any educational program.
Despite these troubling completion statistics, Make School claimed its alumni earned an average starting salary of $95,000[22]. This figure, while impressive, was based on an extremely small sample size and may have masked the program's fundamental inability to retain students through completion.
The company successfully raised $30 million in total funding, including a $15 million Series B in April 2019 led by Venrock, with participation from Learn Capital and Kapor Capital[23]. Other investors included Y Combinator, Kapor Capital, Fresco Capital, Tim Draper, and Alexis Ohanian[24].
The disconnect between investor confidence and student outcomes suggests either inadequate due diligence or that the company successfully obscured its completion rate problems during fundraising.
Make School's collapse resulted from multiple converging failures that ultimately overwhelmed the company's innovative approach to education financing.
The most damaging issue was regulatory non-compliance. From 2016 to 2018, Make School operated illegally as a for-profit college in California without proper authorization[25]. In 2018, California regulators issued an order requiring the company to refund all money paid by students during this period and cancel the associated ISAs[26].
The ISA model, while innovative, became a liability when structured in ways that could saddle students with enormous debt burdens. The July 2021 lawsuit filed by 47 former students alleged predatory practices, with ISA packages potentially totaling over $250,000[27].
Founder Jeremy Rossmann acknowledged the company's end in July 2021, stating: "Make School PBC has now handed over all operations of the bachelor's program to a nonprofit, has cancelled its ISA program, and is winding down"[28].
The catastrophically low completion rate—fewer than 2% of students finishing the program—suggests fundamental product-market fit issues that innovative financing couldn't solve. Students were voting with their feet, abandoning the program at unprecedented rates.
1. Regulatory compliance cannot be bypassed through innovation. Make School's illegal operation from 2016-2018 created existential liability that ultimately contributed to its downfall. Founders in regulated industries must prioritize compliance from day one, not treat it as a later optimization.
2. Product-market fit trumps financing innovation. Despite pioneering ISAs in education, Make School's sub-2% completion rate revealed that students fundamentally rejected the product. No financing model can save a product that doesn't deliver value to its users.
3. Beware of metrics that obscure fundamental problems. High reported starting salaries masked the reality that virtually no students were completing the program. Founders must ensure their key metrics actually reflect the health of their core value proposition.
4. Alignment of incentives requires genuine alignment. While ISAs theoretically aligned Make School's success with student outcomes, the structure still enabled predatory practices when students struggled. True alignment requires sustainable, ethical business models.
5. Regulatory arbitrage is not a sustainable strategy. Operating in legal gray areas or explicitly violating regulations while building scale is a dangerous approach that can destroy years of progress when authorities intervene.
As Jeremy Rossmann later reflected, founders should not think they are above foundational startup advice like "make something people want"[29]. Make School's failure demonstrates that even innovative business models and significant funding cannot overcome fundamental product and compliance issues.